FHA Loan Calculator

Federal Housing Administration (FHA) loans have served as a critical pathway to homeownership for millions of Americans since 1934, particularly benefiting first-time homebuyers and those with limited savings or less-than-perfect credit histories.

Unlike conventional loans, FHA loans are insured by the federal government, allowing approved lenders to offer more flexible qualification requirements while maintaining protection against borrower default.

This government backing has made FHA loans one of the most accessible mortgage products available in the U.S. housing market.

The most attractive feature of FHA loans is the low minimum down payment requirement of just 3.5% for borrowers with credit scores of 580 or higher.

Borrowers with credit scores between 500-579 may still qualify but must provide a 10% down payment.

This contrasts sharply with conventional loans, which typically require 5-20% down payment and favor borrowers with credit scores above 620.

FHA loans also permit higher debt-to-income ratios, accepting up to 43% (and sometimes 50% with compensating factors), compared to the 36-43% typically required for conventional financing.

However, FHA loans come with mandatory mortgage insurance requirements that increase the total cost of borrowing.

Borrowers must pay an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, which can be financed into the loan, plus annual mortgage insurance premiums (MIP) ranging from 0.45% to 1.05% depending on loan amount, term, and loan-to-value ratio.

Unlike conventional PMI, which can be removed once reaching 20% equity, FHA MIP typically remains for the life of the loan for purchases with less than 10% down payment, potentially adding tens of thousands of dollars over the loan term.

FHA loans have specific property requirements and loan limits that vary by county, reflecting local housing market conditions.

The property must be the borrower's primary residence, must meet HUD's minimum property standards for safety and livability, and cannot exceed FHA loan limits which range from $498,257 in low-cost areas to $1,149,825 in high-cost markets for 2024.

FHA loans also restrict seller concessions to 6% of the purchase price and require all FHA-approved repairs to be completed before closing.

Despite these requirements, FHA loans remain an excellent option for buyers prioritizing accessibility over long-term cost efficiency.

Federal Housing Administration (FHA) loans have served as a critical pathway to homeownership for millions of Americans since 1934, particularly benefiting first-time homebuyers and those with limited savings or less-than-perfect credit histories.

Unlike conventional loans, FHA loans are insured by the federal government, allowing approved lenders to offer more flexible qualification requirements while maintaining protection against borrower default.

This government backing has made FHA loans one of the most accessible mortgage products available in the U.S. housing market.

The most attractive feature of FHA loans is the low minimum down payment requirement of just 3.5% for borrowers with credit scores of 580 or higher.

Borrowers with credit scores between 500-579 may still qualify but must provide a 10% down payment.

This contrasts sharply with conventional loans, which typically require 5-20% down payment and favor borrowers with credit scores above 620.

FHA loans also permit higher debt-to-income ratios, accepting up to 43% (and sometimes 50% with compensating factors), compared to the 36-43% typically required for conventional financing.

However, FHA loans come with mandatory mortgage insurance requirements that increase the total cost of borrowing.

Borrowers must pay an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, which can be financed into the loan, plus annual mortgage insurance premiums (MIP) ranging from 0.45% to 1.05% depending on loan amount, term, and loan-to-value ratio.

Unlike conventional PMI, which can be removed once reaching 20% equity, FHA MIP typically remains for the life of the loan for purchases with less than 10% down payment, potentially adding tens of thousands of dollars over the loan term.

FHA loans have specific property requirements and loan limits that vary by county, reflecting local housing market conditions.

The property must be the borrower's primary residence, must meet HUD's minimum property standards for safety and livability, and cannot exceed FHA loan limits which range from $498,257 in low-cost areas to $1,149,825 in high-cost markets for 2024.

FHA loans also restrict seller concessions to 6% of the purchase price and require all FHA-approved repairs to be completed before closing.

Despite these requirements, FHA loans remain an excellent option for buyers prioritizing accessibility over long-term cost efficiency.