Requirements for FHA loans
Are you ready to buy a home but unsure about what mortgage options you qualify for? FHA loans make homeownership more accessible with flexible requirements for borrowers with lower credit and smaller savings.
Low-credit borrowers
FHA loans work with credit scores that might not qualify for conventional loans. Borrowers with scores between 500-579 can secure financing with a 10% down payment, while those with scores above 580 need just 3.5% down.
Loan limits
Loan requirements for FHA mortgages state that your home’s price can’t be more than 115% of your area’s average home price. For 2025, FHA’s nationwide forward mortgage limit “floor” is $524,225 and the “ceiling” is $1,209,750 for a one-unit property. You’ll also need to pay mortgage insurance if you purchase your home with an FHA loan.
Property requirements
An appraisal is required, and the property must be your primary residence to purchase a home with an FHA loan.
Key benefits of an FHA loan
FHA loans can be great home loan options for first-time home buyers. The FHA program makes owning a home more accessible by allowing lower credit scores and down payments. You can also qualify with a higher debt-to-income ratio than traditional loans and accept a seller contribution of up to 6% to help cover closing costs.
Relaxed requirements
Past credit issues? Higher debts? FHA loans are often approved when others aren’t.
Low rates
FHA interest rates typically run lower than other types of home loans, like conventional loans.
Smaller down payments
Save money with FHA home loan down payments as low as 3.5%
Covered closing costs
You can minimize closing costs with up to a 6% seller contribution.
Get an FHA home loan
1 Check your eligibility
FHA loans have more flexible requirements than conventional loans, but you’ll still need to meet minimum credit scores, income verification, and debt-to-income (DTI) ratio standards. You’ll need to make sure the property itself also meets FHA standards, as not all homes qualify for this program.
2 Save for your down payment
FHA loans sometimes offer lower down payment requirements (only 3.5% with a 580+ credit score) compared to conventional mortgages. Although conventional down payments can be as low as 3% for eligible borrowers, they often require higher credit scores. You can also use gift funds for the entire down payment, making homeownership more accessible for first-time buyers.
3 Gather your financial documents
Applying for your FHA loan will require proof of income, assets, and employment history. Make sure you have recent pay stubs, W-2s, tax returns, and bank statements. AmeriSave’s Loan Experts can help you determine which documents you’ll need.
4 Get preapproved
Our Loan Experts can review your income, employment, credit, and assets to determine how much you can borrow and the type of home you can purchase with an FHA home loan. We’ll then issue you a Certified Approval letter that lets sellers know you’re qualified and ready to buy.
5 Make an offer
Not every home qualifies for FHA financing since the house needs to meet HUD’s minimum standards. Once you find a qualifying property, work with your real estate agent to submit an offer. AmeriSave can help ensure your offer addresses all FHA requirements.
6 Close on your home
After final approval to purchase a home with an FHA loan, you’ll receive closing documents to review. Then it’s showtime — at closing, you’ll sign your papers, provide funds for closing costs (which sellers can contribute up to 6% toward), and officially become the proud owner of your new home.