Written and reviewed by Jack Gladden, Senior Loan Officer, NMLS #1470164
Updated · 5-minute read · How these guides are written
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FHA loans in brief
- What it is
- A mortgage insured by the Federal Housing Administration, part of HUD, so lenders can accept lower credit scores and smaller down payments.
- Down payment
- HUD’s minimum is 3.5% with a credit score of 580 or higher, or 10% with a score from 500 to 579.
- Mortgage insurance
- An upfront premium of 1.75% of the loan, usually financed, plus an annual premium paid monthly.
- Who it’s for
- A home you’ll live in, one to four units. You don’t have to be a first-time buyer.
- Residency
- U.S. citizens and lawful permanent residents, for case numbers assigned on or after May 25, 2025.
- Loan limits
- Set by county each year: in 2026, from $541,287 up to $1,249,125 for a one-unit home.
Who qualifies for an FHA loan.
| Requirement | FHA’s rule |
|---|---|
| Credit score 580 or higher | Minimum down payment of 3.5% of the price. |
| Credit score 500 to 579 | Minimum down payment of 10%. |
| Credit score below 500 | Not eligible for FHA financing. |
| Occupancy | Your primary home, moved into after closing; one to four units. |
| Debt-to-income | Commonly up to about 43%, and higher with strong compensating factors. |
| Residency | U.S. citizen or lawful permanent resident, plus a valid Social Security number. |
| The property | An FHA appraisal that also checks safety and soundness; condos must be FHA-approved or get a single-unit approval. |
Down payment and closing costs can come from savings, gifts from family, or down payment assistance programs.
Not sure FHA beats conventional for you?
Send me your credit range, down payment and price range. I’ll price FHA and conventional side by side.
FHA mortgage insurance.
Every FHA loan carries mortgage insurance, which is what lets lenders accept smaller down payments and lower scores. There are two parts:
- Upfront premium
- 1.75% of the loan amount, usually added to the loan rather than paid at closing.
- Annual premium
- Paid monthly. On a typical 30-year loan up to $726,200 it is 0.55% of the balance a year with less than 5% down, and 0.50% with 5% or more down.
- How long it lasts
- For the life of the loan with less than 10% down; with 10% or more down, it ends after 11 years.
Unlike conventional mortgage insurance, FHA’s can’t be cancelled once you reach 20% equity. To remove it, most owners later refinance into a conventional loan.
2026 FHA loan limits.
HUD sets a maximum FHA loan for each county every year. These are the 2026 limits for a one-unit home in the counties I work in most; two- to four-unit limits are higher.
| County | 2026 FHA limit |
|---|---|
| Los Angeles, Orange (CA) | $1,249,125 |
| San Diego (CA) | $1,104,000 |
| Sacramento (CA) | $764,750 |
| Miami-Dade (FL) | $667,000 |
| Franklin, Columbus (OH) | $591,100 |
| Duval, Jacksonville (FL) | $580,750 |
| Maricopa, Phoenix (AZ) | $557,750 |
| Pima, Tucson (AZ); Hillsborough and Orange (FL); Cuyahoga and Hamilton (OH) | $541,287 |
FHA or conventional?
FHA isn’t automatically cheaper. With good credit and 5% or more down, conventional often costs less over time because its mortgage insurance can be removed. I price both.
| FHA | Conventional | |
|---|---|---|
| Lowest credit accepted | 500, with 10% down | Usually 620 |
| Minimum down payment | 3.5% with a 580+ score | As little as 3% for some buyers |
| Mortgage insurance | Upfront plus annual; often for the life of the loan | Monthly; can be removed at 20% equity |
| Debt-to-income | More flexible | Usually stricter |
| Property | Primary home only; stricter condition checks | Primary, second home or investment |
| Best for | Lower scores, higher debt-to-income | Good credit, 5%+ down |
Other FHA programs.
FHA 203(k)
Buy or refinance and finance the repairs in one loan.
Best forFixer-uppers; see renovation loans
Streamline refinance
Refinance an existing FHA loan with less paperwork, often without a new appraisal.
Best forCurrent FHA borrowers
Cash-out refinance
Up to 80% of the home’s value, for owners who have lived there at least a year.
Best forOwners who need equity
Manufactured homes
FHA financing for homes on a permanent foundation.
Best forSee manufactured home loans
The catch with FHA.
- Mortgage insurance that stays. With less than 10% down, the annual premium lasts for the life of the loan unless you refinance.
- The upfront premium. 1.75% added to your loan, so you start with a slightly bigger balance.
- Loan limits. Higher-priced homes may exceed the county limit.
- Property standards. Homes needing significant repairs may not pass the FHA appraisal without a renovation loan.
How we get started.
Tell me your numbers
Credit range, income, down payment and the price range you’re looking at.
I price FHA and conventional
Side by side, including mortgage insurance, so you see the real difference.
Pre-approval
So you can make offers with confidence.
Appraisal and closing
The FHA appraisal, underwriting, and your keys.
FHA loans, answered plainly.
What is an FHA loan and who qualifies?
A government-insured mortgage for a home you’ll live in. Most buyers with a credit score of 580 or higher and steady income can qualify, as can some with scores from 500.
How much do I need to make to buy a house with an FHA loan?
Lenders compare your total monthly debts, including the new payment with taxes, insurance and FHA mortgage insurance, to your gross monthly income. FHA commonly allows up to about 43%, and more with strong compensating factors. So the income you need is roughly (the new housing payment plus your other monthly debts) ÷ 0.43. Tell me the price, your down payment and your debts, and I’ll work out the exact figure at today’s rates.
What is the catch with an FHA loan?
Mortgage insurance: an upfront premium plus an annual premium that, with less than 10% down, lasts for the life of the loan unless you refinance.
Can I put 20% down on an FHA loan?
Yes, but with 20% down a conventional loan usually costs less, because it needs no mortgage insurance.
What disqualifies you from an FHA loan?
A credit score below 500, a home you won’t live in, a loan above the county limit, residency outside FHA’s rules, or recent bankruptcy or foreclosure within its waiting periods.
Do I have to be a first-time buyer to get an FHA loan?
No. FHA is open to repeat buyers too, as long as it’s your primary home. Most people have only one FHA loan at a time.
Can I remove FHA mortgage insurance?
With 10% or more down, it ends after 11 years. Otherwise it lasts the life of the loan, so most owners refinance into a conventional loan once they have enough equity.
Can I use FHA for a condo?
Yes, if the building is FHA-approved, or the unit gets a single-unit approval. See also: Condo financing.
Why do some sellers avoid FHA offers?
Mostly because FHA appraisals check the home against FHA’s property standards, so some repairs may be required before closing, and a condo building must be FHA-approved. A clean pre-approval and a home in good condition usually settle it.
What are the new FHA rules for 2026?
The changes that matter most: the 2026 loan limits, from $541,287 for a one-unit home in most counties to $1,249,125 in high-cost areas, and the residency rule that took effect in May 2025, under which FHA loans are for U.S. citizens and lawful permanent residents. FHA updates its handbook through the year, so I check the current rules when you apply. See also: USDA vs FHA loans.
Conventional
First-time buyers & down payment help
Renovation
Hard-to-finance condos