Low down-payment financing backed by the Federal Housing Administration—perfect for first-time buyers, credit-rebuilders, and anyone who needs extra flexibility.
Fast Facts for 2025
| Minimum Down Payment | 3.5 % with 580+ FICO; 10 % with 500–579 FICO |
| Up-Front MIP (UFMIP) | 1.75 % of the base loan amount—can be rolled into the loan balance |
| Annual MIP | Typically 0.55 % (ranges 0.15 %–0.75 % based on term, LTV, and loan size) |
| 2025 Loan Limits | Floor: $524,225 · Ceiling (high-cost areas): $1,209,750 for one-unit homes FHA.com |
| Occupancy | Owner-occupied primary residence only |
| Assumability | Yes—future buyers can assume your FHA mortgage (subject to lender approval) |
Why Choose an FHA Loan?
- Small Down Payment – Buy with as little as 3.5 % cash.
- Flexible Credit Guidelines – Manual underwriting possible for scores down to 500.
- Lenient DTI – Back-end ratios up to 56.9 % with compensating factors.
- Gift Funds & DPA Friendly – 100 % of down payment and closing costs may come from gifts or approved assistance programs.
- Renovation & Energy Options – Finance upgrades or efficiency improvements right in your mortgage.
- Assumable at Low Cost – Your low-rate FHA loan can be transferred to a qualified buyer, boosting future resale appeal.
FHA Programs at a Glance
| Program | Best For | Highlights |
|---|---|---|
| Standard 203(b) | First-time & repeat buyers | 3.5 % down, 15–30 yr fixed or ARM |
| FHA 203(k) Limited | Cosmetic renovations ≤ $35k | One loan covers purchase + repairs, streamlined draws |
| FHA 203(k) Standard | Major rehab projects > $35k | Consultant-monitored draws, up to 110 % of after-repair value |
| FHA Streamline Refinance | Existing FHA borrowers | No appraisal, minimal income docs, UFMIP refund possible |
| FHA Cash-Out Refinance | Equity access up to 80 % LTV | Consolidate debt, fund tuition, or invest |
| Energy Efficient Mortgage (EEM) | Green upgrades | Add up to $8,000 for qualifying improvements without re-qualifying |
Eligibility Checklist
- Credit Score: 580+ for 3.5 % down; 500–579 with 10 % down
- Debt-to-Income: Typically ≤ 43 %; higher with compensating factors
- Property Standards: Must meet FHA appraisal & HUD minimum property requirements
- Occupancy: Primary residence within 60 days of closing
- Mortgage Insurance: UFMIP + annual MIP for 11 yrs (≥10 % down) or life of loan (<10 % down)
2025 Annual MIP Chart (Most Common 30-Year Terms)
| Base Loan Amount | LTV ≤ 90 % | LTV > 90 % |
|---|---|---|
| ≤ $726,200 | 0.50 % | 0.55 % |
| > $726,200 | 0.70 % | 0.75 % |
Shorter terms (≤15 yrs) carry 0.15–0.65 %.
How the FHA Process Works with American Mortgage Network
- Discovery Call (10 min) – Outline goals and run a soft-pull pre-qual.
- Rate Quote & Loan Estimate – Transparent fees, no surprises.
- E-Disclosure & Upload – Secure portal for pay stubs, W-2s, bank statements.
- Appraisal & Underwriting – FHA-certified appraisal; quick turn underwriting.
- Clear-to-Close – Receive Closing Disclosure, schedule remote or in-person signing.
- Move-In! – Collect the keys and start building equity.
Average contract-to-close: 15–25 days with our digital workflow.
Frequently Asked Questions
Can I remove FHA mortgage insurance later?
Yes—refinance into a conventional loan once you reach 80 % LTV and meet credit requirements.
Are seller concessions allowed?
Absolutely—sellers can pay up to 6 % of the purchase price toward your closing costs.
Can I use an FHA loan for a duplex or four-plex?
Yes, up to four units as long as you occupy one unit; higher loan limits apply.
What if I’ve had a bankruptcy or foreclosure?
FHA allows 2 yrs after Chapter 7 discharge and 3 yrs post-foreclosure/short sale (sooner with extenuating circumstances).
Tools & Resources
- FHA Payment Calculator – Estimate PITI + MIP in seconds
- 203(k) Rehab Budget Worksheet – Plan renovations line by line
- Down-Payment Assistance Finder – State & local DPA programs searchable by ZIP
- Mortgage Glossary – Quick definitions from “APR” to “UFMIP”