Who’s a Good Fit for FHA
Buyers and refinancers who will live in the house and need more room on credit, down payment, or monthly debts than conventional usually allows. A 2–4 unit works if you live in one of the units. If you’re a veteran with eligibility, look at VA first.
It’s for a house you’ll live in. Not a second home. Not a rental. You typically move in within 60 days.
Credit and down payment
A 580 credit score can use FHA’s 3.5% down payment. From 500 to 579, 10% down is still an option with FHA. Under 500, HUD will not insure the loan. Those are HUD’s bands. A lender can still ask for more.
Monthly debts
On a typical automated FHA file, total monthly debts can run higher than conventional. Conventional often tops out around 50% of gross income. An automated FHA file can sometimes go into the mid-50s. That’s a ceiling some files hit, not a promise, and it is not a pre-approval.
Mortgage insurance
FHA has an upfront premium (most people finance it) and a monthly premium. Put less than 10% down and the monthly premium usually lasts the life of the loan. Put 10% or more down and it typically drops off after 11 years.
Common questions
- Can someone gift the down payment?
- Yes, from an eligible donor, with no payback. Family is the usual path. We document it.
- Does the condo have to be special?
- Yes. It has to be on FHA’s approved list.
- Can the next owner take over this loan?
- FHA loans are assumable if that buyer qualifies.
- Are there loan-size limits?
- Yes, by county. We check yours against the house. I won’t print a number here that will be stale next year.
What I need from you
Income, assets, credit, and a property that can meet FHA standards. Then we apply. Talk to me first if you want a second set of eyes on whether FHA is actually the right box.