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Approximately 40% of all home loans in the US are through the Federal Housing Administration (FHA). An FHA Loan is one of the easiest types of mortgage loans to qualify for because they require a low down payment and the borrower can have less-than-perfect credit.

Requirements for an FHA Loan:

  • 500 to 579 FICO score requirement* and 10% down payment
    OR 580 or above FICO score requirement with least a 3.5% down payment
  • An appraisal must be done by an FHA approved appraiser
  • Mortgage insurance (MIP) usually around 0.85 percent of the loan amount annually
  • Steady employment with proven income with recent tax returns, W2’s, and paycheck stubs
  • Two years of employment at the same company
  • Must occupy the home as primary residence
  • At least 18 years of age


  • An FHA Loan is very popular for first-time home buyers because of their flexible qualifying guidelines and low down payments
  • Borrowers with credit scores as low as 500 can qualify
  • Lower income borrowers can get approved for a home loan through the FHA due to the FHA allowing lenders more flexibility on debt-to-income ratios than conventional mortgages
  • Lower interest rates when compared with conventional loans, which can result in large net savings over the lifetime of a loan


  • Lower loan limits
  • Homes that need renovations do not qualify
  • Mortgage insurance is required, and Mortgage insurance costs are higher upfront
  • More required paperwork
FHA loan