FHA mortgage benefits & guidelines

Backed by the Federal Housing Administration (FHA), FHA loans make homeownership more accessible for borrowers with less-than-perfect credit or who are struggling to save for a down payment. By insuring these loans, the FHA encourages lenders to offer competitive terms, opening the door to affordable home financing for more buyers.

 

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Why choose an FHA mortgage?

FHA mortgage rates are similar to conventional mortgage rates, but your final rate will depend on your credit score, history of managing debt and mortgage insurance requirements. Get personalized rates for an FHA mortgage by providing answers to a few questions below. See mortgage rate disclaimers for assumptions and details.

FHA mortgage guidelines

To qualify for an FHA mortgage, you will need:

  • Minimum credit score of 580
  • Down payment of at least 3.5% of the home's purchase price  
  • Debt-to-income (DTI) ratio of 43% or lower 

    • You’ll also be required to pay mortgage insurance premiums. If you have a credit score at the 500 level, you’ll need a 10% down payment. Purchase-price limits will apply, so if a home's price exceeds FHA limits, buyers may need to explore other financing options, such as conventional loans. 

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    Types of FHA mortgages

    FHA offers products that could help with purchases, refinancing, renovation costs and energy-efficient home improvements. 

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    FHA 203(k) renovation loan****

    FHA 203k renovation loans can be used for kitchen remodels, bathroom rehabs and other essential upgrades.

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    FHA Energy Efficient Mortgage (EEM)

    The FHA EEM program allows homeowners to finance energy-efficient improvements through their mortgage.

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    FHA Simple Refinance

    With an FHA Simple Refinance, you can refinance your FHA loan for a lower rate or better terms, but you will need an appraisal.

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    FHA cash-out refinance***

    An FHA cash-out refinance allows you to swap out your mortgage for a larger loan and get the difference back in cash. 

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    FHA 30-year fixed

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    Rates current as of . National Average Rates. OBMMI calculates national averages from actual locked rates across 35% of all mortgage transactions nationwide using borrower attributes to provide configurable trending of rates over time. Data is provided for informational use only and is not advertised as available pricing from Rate.

    What are the current FHA loan rates*?

    FHA mortgage rates are similar to conventional mortgage rates, but your final rate will depend on your credit score, history of managing debt and mortgage insurance requirements. Use the button to see current rates for an FHA home loan. See mortgage rate disclaimers for assumptions and details. 

     

    How to apply for an FHA loan

    Applying for an FHA mortgage is simple with Rate’s Digital Mortgage. Follow these steps. 

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    1. Review your finances

    Check your credit score, income, DTI ratio and cash on hand for a down payment. 

     

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    2. Gather key documents

    In most cases, you’ll need to provide income verification, tax returns, asset statements and personal identification.   

     

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    3. Apply online

    Once you submit your application, your Loan Officer will help you from there. 

     

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    “They were able to smoothly convey trust and dedicated support to me and my wife during a home purchase. I would highly recommend this team to prospective home buyers.”

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    Whether you’re buying a home or refinancing, there’s never been a better time to lock in a lower rate.

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    Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply. 
 
    * Savings, if any, vary based on the consumer’s credit profile, interest rate availability, and other factors. Contact Rate for current rates. Restrictions apply. 
 


    **By refinancing, you may pay more in costs and interest over the extended term. 
 


    *** Using funds from a Cash-out Refinance to consolidate debt may result in the debt taking longer to pay off as it will be combined with borrower’s mortgage principle amount and will be paid off over the full loan term. Contact Rate, Inc. for more information.  
 


    **** Credit score and down payment requirements higher for 2-4 unit, investment properties and renovation products. 
     
Rate, Inc. has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture or any other government agency. 
     
    Sources: https://www.hud.gov/program_offices/housing/sfh/ins/streamline