The minimum down payment is 3.5% for an FHA mortgage with a 580 credit score.
Shop for interest rates, boost your credit score as high as you can (740 is ideal) and make more than the 3.5% minimum down payment if possible.
Most lenders offer FHA loans, but it’s always best to shop with three to five lenders to make sure you’re getting the best FHA interest rates.
You’ll have a lower mortgage payment, but you’ll still have to pay both types of mortgage insurance. However, the MIP will automatically drop off after 11 years.
No. The FHA doesn’t set income restrictions. However, if you’re applying for down payment assistance (DPA), income limits may apply.
You can ask for a gift or closing cost assistance if you’re short on funds. FHA guidelines allow the seller to pay up to 6% of your loan amount toward closing costs. You can also ask the lender for a no-cost loan — the lender raises your interest rate and pays the costs on your behalf.
If your credit score is under 620 or you have a high DTI ratio, an FHA loan may be your best option versus a conventional loan. Conventional loan requirements set a minimum credit score of 620, which is significantly higher than the 500 minimum score for FHA loans. Additionally, as of Aug. 1, 2023, conventional loan borrowers with a DTI over 40% will see extra fees or higher rates.
No. Anyone who meets FHA loan requirements can qualify for an FHA loan through an FHA-approved lender.