An FHA loan is a government-backed mortgage designed to make homeownership more accessible—especially for first-time buyers or those with less-than-perfect credit.
💡 Highlights:
- Low Down Payment: Just 3.5% down with a 580+ credit score
- Flexible Credit Requirements: Qualify with a score as low as 580 (or 500 with 10% down)
- Lower Closing Costs: May be rolled into the loan
- Mortgage Insurance: Required (called MIP), but helps you qualify more easily
- Higher DTI Ratios Allowed: More flexible debt-to-income guidelines than conventional loans
- Loan Limits: Set by county (in 2025, usually around $524,225 and a ceiling of $1,209,750; higher in expensive areas)
✅ Great For:
- First-time homebuyers
- Those rebuilding credit
- Buyers with limited savings
With easier qualifications and a small down payment, FHA loans are a great stepping stone to homeownership.
Is a FHA loan right for you?
Worried about a low credit score or not being able to afford a large down payment? With less strict requirements, a FHA home loan may be the right loan for you.
Benefits of a FHA loan
- FICO Flexibility:Â The FHA home loan has less strict FICO score requirements, allowing more people to qualify for a home loan.
- Gift Funds Allowed:Â Gift funds are allowed for the down payment, which means your family can help.
- Flexible Qualification:Â Requirements for an FHA loan are generally more relaxed compared to other loans.
FHA loan eligibility requirements
- Credit score higher than 500 with 10% down
- Credit score higher than 580 with 3.5% down
- Ability to cover 3.5% down payment
- Reasonable debt-to-income ratio
- Home must be the borrower’s primary residence
Check out what your monthly payment could be by using our FHA Mortgage Calculator…
Our mortgage calculators are for demonstration purposes only and may not reflect actual numbers for your specific mortgage. Contact us and we will walk you through the best possible mortgage scenario for your specific needs!
Principal & Interest (P&I)
$
MIP
$
Taxes & HOA
$
Homeowners Insurance
$
Purchase Price
Home Value
$
- Down Payment
$
Current Mortgage Balance
$
+ Cash Out
$
+ Upfront MIP
$
Total Loan Amount
New Loan Amount
$
Home Equity After Cash Out
$
Upfront MIP
$
Estimated Taxes & Insurance
Property taxes are generally estimated to be 1.2% of the home's value, but may vary based on your location. Annual homeowners insurance is roughly 0.35% of the home's value but can change based on insurer. Your loan specialist can help you determine property tax and insurance rates in your area.
Annual MIP
The Annual MIP ranges from 0.15% to 0.75% depending on loan term, loan amount and down payment. However, for most FHA borrowers, the Annual MIP is 0.75% of the loan amount. The Annual MIP can last for the life of the loan, or be removed after 11 years if the original down payment is 10% or more.
Upfront MIP
The Upfront MIP, sometimes referred to as the FHA funding fee, is 1.75% of the loan amount. This fee is due at closing and is typically financed into the entire loan amount to reduce out of pocket costs.
Amount Financed
Purchase Price (-) Down Payment (+) Upfront MIP
Estimated Payment
$ /mo
Loan amount
$
Down payment
$
Cash Out
$
Home Equity After Cashout
$
Interest rate
Loan term
Taxes & insurance included?
Property tax
Homeowner's insurance
$
Upfront MIP
$
Annual MIP rate
$
Monthly MIP
$
HOA dues
$
Payment Breakdown
Amortization
Principal vs. Interest
Amortization Schedule Breakdown
Our detailed amortization schedule breaks down your mortgage payments, showing how they are split between interest and principal over the life of your loan.
Note: The actual monthly payment may be higher than what is shown here, as this schedule does not account for variable costs such as property taxes and home insurance, which are often included in your total mortgage payment.
- Principal payments: $$240,000 (the amount borrowed)
- Interest payments: $$297,554 (the cost of borrowing)