Government-backed · Purchase & refinance
FHA loans
- 3.5% down with 580+ credit
- Gift funds can cover the whole down payment
- Approvals with higher debt-to-income
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration that allows a 3.5% down payment with a credit score of 580 or higher, and 10% down with scores from 500 to 579. It charges an upfront and annual mortgage insurance premium in exchange for flexible credit and debt-to-income guidelines.
Use it to buy
- 3.5% down with a 580 score, 10% with 500–579
- The entire down payment can be a gift
- Buy up to 4 units if you live in one
The catch: With under 10% down, mortgage insurance lasts the life of the loan.
Use it to refinance
- FHA streamline: often no appraisal or income docs
- Cash-out up to 80% of your home’s value
- Or refinance to conventional to drop MIP
The catch: Streamline needs an existing FHA loan, six on-time payments, and a lower payment.
Ways to set it up
Choose these when you lock your rate. You’ll see the cost of each option in dollars.
What you need to qualify
| Requirement | Guideline | Notes |
|---|---|---|
| Minimum credit score | 580 (3.5% down) · 500 (10% down) | Many lenders set a 580 or 600 floor |
| Down payment | 3.5% | Can be entirely gift funds or approved down payment assistance |
| Debt-to-income (DTI) | Up to 43% – 50% | Up to 56.9% with automated approval and compensating factors |
| Loan limit | Varies by county | Higher in high-cost counties, up to the FHA ceiling |
| Mortgage insurance | 1.75% upfront + 0.55% annual | Annual MIP lasts the life of the loan when down payment is under 10% |
| Occupancy | Primary residence only | Up to 4 units if you live in one |
Check the basics
A quick starting point, not an approval. Three questions, no credit check. Your full application confirms income, assets, and more.
Answer the questions to see your result.
An estimate based on typical guidelines. Not a pre-approval or commitment to lend.
Pros and cons
Pros
- Accepts credit scores as low as 580 at 3.5% down
- The whole down payment can be a gift
- Allows higher debt-to-income than conventional
- Shorter wait after bankruptcy or foreclosure
Cons
- Mortgage insurance usually lasts the life of the loan
- 1.75% upfront premium adds to your balance
- Stricter property condition standards
- Primary residence only
Common questions
What credit score do I need for an FHA loan?
FHA allows a 580 score with 3.5% down and 500–579 with 10% down. Most lenders apply their own minimum of 580 to 620.
How much is FHA mortgage insurance?
You pay 1.75% of the loan amount upfront, usually financed, plus an annual premium of about 0.55% for most 30-year loans, divided into monthly payments.
Does FHA mortgage insurance ever go away?
If you put down less than 10%, annual MIP lasts for the life of the loan. With 10% or more down, it ends after 11 years. Many borrowers refinance to conventional once they reach 20% equity.
Can I use gift money for an FHA down payment?
Yes. The entire 3.5% can come from a family member, employer, or approved down payment assistance program, documented with a gift letter.
What is the maximum DTI for FHA?
Standard guidelines allow 43%, but automated approvals commonly go to 50% and as high as 56.9% with strong compensating factors.
Can I buy a duplex or fourplex with FHA?
Yes, up to four units as long as you live in one. Rental income from the other units can help you qualify.
How long after bankruptcy or foreclosure can I get an FHA loan?
Generally 2 years after a Chapter 7 discharge, 1 year into a Chapter 13 plan with court approval, and 3 years after a foreclosure.
What is an FHA streamline refinance?
A simplified refinance for existing FHA borrowers that often requires no appraisal or income verification, as long as it produces a net tangible benefit and you have made six on-time payments.
Are FHA rates lower than conventional?
FHA base rates are often slightly lower, but mortgage insurance usually makes the total monthly cost higher for borrowers with strong credit. Compare the full payment, not just the rate.
Keep exploring
See what an FHA loan costs for you.
Enter a few details to see your rate, points, and monthly payment. No credit check. No phone number.
Disclosures
- Lendid Direct is not affiliated with or endorsed by HUD or the Federal Housing Administration.
- Mortgage insurance premiums follow the current HUD schedule and may change.
- FHA streamline refinances require a net tangible benefit as defined by HUD.
- Rates, terms, and programs are subject to change without notice and to credit and property approval. Not all applicants will qualify.
- Lendid Loans, LLC is a licensed mortgage broker in Texas, Florida, Colorado, and Oklahoma. All loans originated through Lendid Direct are brokered by Lendid Loans, LLC. This is not a commitment to lend. Programs, rates, terms, and conditions are subject to change without notice. All loans subject to credit approval. NMLS# 1470572.
- Equal Housing Opportunity.