Get an affordable down payment when you buy with an FHA loan.

FHA home loans open doors for home buyers who might struggle with conventional mortgages. You’ll likely qualify with a 580+ credit score (3.5% down) or even 500-579 (10% down). If you have a steady income and meet your lender’s debt-to-income and credit score requirements, FHA home loans might be for you.

FHA loans and FHA refinance loans are government-backed mortgages with looser credit requirements (as low as 500) and lower down payments (as low as 3.5%). The lower down payment amount requires buyers to carry mandatory mortgage insurance for the loan’s lifetime. Conventional loans require better credit (620+) but don’t have insurance requirements with 20% down. Conventional loans also work for more than just primary residences. 

Here’s a breakdown of the pros and cons of an FHA loan:

Pros of an FHA Loan:

• Lower credit score requirements allow more borrowers to qualify for homeownership
• Minimum down payment of just 3.5% reduces initial out-of-pocket expenses
• More forgiving approach to credit history issues and past financial challenges

Cons of an FHA Loan:

• Mandatory mortgage insurance remains for the entire loan term in most cases
• Loan limits may restrict purchasing power in higher-priced housing markets
• Properties must meet specific HUD standards, limiting options for homes needing repairs