🏡 FHA Loan Cheat Sheet

The First-Time Buyer's Best Friend — Backed by HUD

Equal Housing OpportunityWhat Is an FHA Loan?

An FHA loan is a government-backed mortgage insured by the Federal Housing Administration (a division of HUD). Private lenders fund it, but the FHA insures it—meaning lenders can offer lower down payments and more flexible credit requirements than conventional loans. It's especially popular with first-time buyers, but anyone can qualify.


Top Benefits

  • Low Down Payment — As little as 3.5% down with a 580+ credit score.
  • Flexible Credit — Scores as low as 500 may qualify (with 10% down).
  • Higher DTI Allowed — Up to 43%–57% in some cases.
  • Gift Funds Allowed — 100% of down payment can come from a gift.
  • Assumable Loan — A future buyer can take over your FHA loan and rate.
  • Competitive Rates — Often comparable to or better than conventional.
  • Seller Concessions — Sellers can contribute up to 6% toward closing costs.

Eligibility Snapshot

Credit Score580+ for 3.5% down / 500–579 for 10% down
Down PaymentMinimum 3.5% of purchase price
Debt-to-IncomeGenerally 43% or less (exceptions possible)
EmploymentSteady income, 2-year work history preferred
OccupancyMust be primary residence
CitizenshipU.S. citizens, permanent & non-permanent residents eligible
💡 No first-time buyer requirement. Anyone meeting the criteria can use an FHA loan—even if you've owned before.

Mortgage Insurance Premiums (MIP)

FHA loans require two types of mortgage insurance:

  • Upfront MIP (UFMIP): 1.75% of the loan amount — can be rolled into the loan.
  • Annual MIP: 0.15%–0.75% of the loan balance, paid monthly (varies by loan term, LTV, and amount).
  • Duration: If down payment is less than 10%, MIP stays for the life of the loan. With 10%+ down, MIP drops off after 11 years.
🔄 Want to drop MIP later? Refinance into a conventional loan once you hit 20% equity and credit qualifies.

2024 FHA Loan Limits

Limits vary by county based on local home prices:

  • Low-cost areas (floor): $498,257 (single-family)
  • High-cost areas (ceiling): $1,149,825 (single-family)
  • Special exceptions: Alaska, Hawaii, Guam, U.S. Virgin Islands have higher ceilings
  • Higher limits apply for 2-, 3-, and 4-unit properties

Property Requirements

  • Must be your primary residence (no investment properties).
  • Property must pass an FHA appraisal meeting Minimum Property Standards (MPS).
  • Eligible: single-family, FHA-approved condos, townhomes, 2–4 unit (owner-occupied), manufactured homes (with restrictions).
  • Property must be safe, sound, and secure—no major defects.

FHA Loan Types

203(b) StandardThe classic FHA purchase loan—low down, flexible credit.
203(k) RenovationBuy + renovate in one loan. Great for fixers.
FHA Streamline RefiRefinance an existing FHA loan with minimal docs.
FHA Cash-Out RefiTap equity up to 80% LTV.
Energy Efficient MortgageRoll energy upgrades into the loan.
HECM (Reverse)For homeowners 62+ to tap equity.

FHA vs. Conventional — Quick Compare

Min Down PaymentFHA: 3.5% • Conv: 3%–5%
Min Credit ScoreFHA: 500 • Conv: 620+
Mortgage InsuranceFHA: Life of loan (under 10% down) • Conv: Removable at 20% equity
Loan LimitsFHA: County-based • Conv: Higher in most areas
Assumable?FHA: Yes • Conv: Rarely
Property StandardsFHA: Stricter appraisal • Conv: More flexible

Common Myths — Busted

  • Myth: FHA is only for first-time buyers. Truth: Anyone meeting criteria can use it.
  • Myth: Sellers hate FHA offers. Truth: A strong, well-packaged FHA offer competes fine.
  • Myth: FHA loans are slow. Truth: Most close in 30–45 days.
  • Myth: You're stuck with MIP forever. Truth: Refinance to conventional once you build equity.
  • Myth: FHA = bad credit only. Truth: Plenty of strong-credit buyers use it for the low down payment.

Ready to See If You Qualify?

📞 Call/Text: 7066395907
📧 Email: mark@bestloans4me.com
🌐 Apply online: bestloans4me.com/applyMark