An FHA loan is a mortgage insured by the Federal Housing Administration. It is designed to help first-time homebuyers and those with lower credit scores or smaller down payments achieve homeownership. FHA loans are offered through approved lenders and backed by the government.

What credit score do I need for an FHA loan?

FHA loans accept credit scores as low as 500. With a score of 580 or higher, you can qualify for the minimum 3.5% down payment. Scores between 500-579 require a 10% down payment. FHA loans are more forgiving of past credit issues than conventional loans.

How much is the FHA down payment?

The minimum down payment for an FHA loan is 3.5% of the purchase price if your credit score is 580 or higher. For example, on a $300,000 home, you would need $10,500 down. Down payment funds can come from savings, gifts from family, or down payment assistance programs.

What is FHA mortgage insurance?

FHA loans require two types of mortgage insurance: an upfront premium (UFMIP) of 1.75% of the loan amount, and an annual premium (MIP) of 0.55% paid monthly. Unlike conventional PMI, FHA MIP typically remains for the life of the loan unless you refinance to a conventional loan.

What are FHA loan limits?

FHA loan limits vary by county. For 2024, the floor limit is $498,257 and the ceiling is $1,149,825 in high-cost areas. Washington state limits range from $498,257 to $977,500 depending on the county.

Can I use an FHA loan for a fixer-upper?

Yes! The FHA 203(k) loan allows you to finance both the purchase and renovation of a home with a single mortgage. This is great for buyers who want to purchase a home that needs repairs or updates.

FHA Loans | Q Home Loans

What is FHA?

An FHA loan is a mortgage insured by the Federal Housing Administration, designed to help first-time homebuyers and those with less-than-perfect credit achieve homeownership. FHA loans require lower down payments (as little as 3.5%) and have more flexible credit requirements compared to conventional loans. The FHA insurance protects lenders against losses if borrowers default, making it easier for more people to qualify.

Why Choose FHA Loans?

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Low Down Payment

As little as 3.5% down payment with credit score of 580+

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Flexible Credit Requirements

More lenient credit score requirements compared to conventional loans

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Competitive Interest Rates

Often lower rates than conventional loans for borrowers with lower credit scores

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Assumable Loans

FHA loans can be assumed by qualified buyers when you sell

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Refinance Options

FHA Streamline Refinance available for existing FHA borrowers

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Renovation Financing

FHA 203(k) loans allow you to finance home improvements

FHA Loans Requirements

Basic Qualifications

Credit Score: Contact Q Home Loans for details
Down Payment: 3.5% minimum (higher credit scores) or 10% (lower scores)
Debt-to-Income Ratio: Typically 43% maximum
Property Type: Primary residence only (1-4 units)
Mortgage Insurance: Required (upfront + annual premiums)

Required Documents

Pay stubs (last 30 days)
W-2 forms (last 2 years)
Tax returns (last 2 years)
Bank statements (last 2 months)
Employment verification
Photo ID and Social Security card

How It Works

FHA loans work by providing government-backed insurance that protects lenders if borrowers default. You'll pay an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount at closing, plus an annual premium (0.45%-1.05% depending on loan term and LTV) divided into monthly payments. The lower down payment and flexible credit requirements make FHA loans ideal for first-time buyers who may not have large savings or perfect credit.

Who Should Consider FHA Loans?

First-Time Homebuyers

Limited savings for down payment but steady income and employment history

Credit Rebuilders

Working to improve credit after past financial challenges

Self-Employed Borrowers

Can document income but may not qualify for conventional loans

Multi-Family Investors

Want to live in one unit and rent others (up to 4 units)