Loan Options • FHA Home Loan
FHA home loans
FHA loans are insured by the Federal Housing Administration and are known for flexible credit guidelines and low down payment options.
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At a glance
- Flexible credit and income guidelines
- Low down payment options
- Gift funds from family can help with closing costs
- Purchase, refinance and rehab (203k) options
Talk with a licensed loan officer
Is it right for you?
Who an FHA loan is for
An FHA loan is a mortgage insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development (HUD). Because the government insures the loan, lenders can approve borrowers who might not fit the stricter boxes of a conventional loan. That makes FHA a strong option if you are buying your first home, rebuilding your credit, carrying student loans or other monthly debt, or working with limited savings.
FHA loans are for homes you will live in. You can use one to buy or refinance a single-family home, an FHA-approved condo, a townhome or a 2 to 4 unit property as long as you live in one of the units.
FHA requirements in plain English
Credit history
HUD sets a minimum score of 500, with 3.5% down available at 580 and above. Individual lenders, including FLO Mortgage, may have their own minimums. Past credit events are not automatic deal-breakers: FHA generally allows a new loan two years after a Chapter 7 bankruptcy discharge and three years after a foreclosure, with shorter timelines possible in documented hardship situations.
Income and employment
Expect to document about two years of income history. W-2, self-employed, retirement, Social Security and many other income types can count when they are stable and likely to continue.
Down payment and closing costs
Your down payment can come from savings, a documented gift from a family member, employer or other eligible donor, or an approved down payment assistance program. Sellers can contribute up to 6% of the sales price toward your closing costs.
The property
The home must be your primary residence, and you generally move in within 60 days of closing. An FHA appraisal checks value and confirms the home meets HUD’s minimum property standards for safety, security and soundness. Condos must be in an FHA-approved project or qualify for a single-unit approval.
Understanding FHA mortgage insurance
Every FHA loan includes mortgage insurance premium (MIP). It is what allows FHA to accept smaller down payments and more flexible credit. There are two parts:
- Upfront MIP: 1.75% of the base loan amount. Most borrowers add it to the loan instead of paying it in cash at closing.
- Annual MIP: Most 30-year FHA loans pay 0.50% to 0.55% of the loan balance per year, split into your monthly payment. Rates differ for 15-year terms and larger loan amounts.
FHA pros and cons
Advantages
- Low 3.5% down payment
- Flexible credit and debt-to-income guidelines
- Gift funds and seller help welcome
- Rates are often competitive for borrowers with lower scores
- Can be assumed by a qualified buyer when you sell
- Streamline refinance option later
Trade-offs
- Upfront and annual mortgage insurance
- MIP may last the life of the loan
- Primary residences only
- County loan limits apply
- Stricter property condition standards
Compare loan programs
How this loan compares
Switch between programs to see how down payment, credit, mortgage insurance and loan limits stack up side by side.
| Feature | Conventional | FHA | VA |
|---|---|---|---|
| Minimum down payment | 3% for eligible buyers; 5% is common | 3.5% with a 580+ score; 10% with 500 to 579 | 0% with full entitlement |
| Credit profile | Underwriting reviews your full credit picture; higher scores earn better pricing | Designed for credit flexibility; lender minimums apply | No minimum set by the VA; lender minimums apply |
| Mortgage insurance | PMI when you put down less than 20% | Upfront MIP of 1.75% plus annual MIP (0.55% for most 30-year loans) | No monthly mortgage insurance |
| Can mortgage insurance end? | Yes. Request removal at 80% loan-to-value; it ends automatically at 78% | Only after 11 years if you put down 10% or more; otherwise it lasts for the life of the loan unless you refinance | Not applicable |
| Upfront program fee | None | 1.75% upfront MIP (can be financed) | Funding fee of 1.25% to 3.3% (waived for many disabled veterans) |
| 2026 loan limit (1 unit) | $832,750 baseline; up to $1,249,125 in high-cost areas | $541,287 to $1,249,125 depending on county | No VA loan limit with full entitlement |
| Property types | Primary homes, second homes and investment properties | Primary residence, 1 to 4 units | Primary residence, 1 to 4 units |
| Who can apply | Any qualified borrower | Any qualified borrower who will live in the home | Eligible veterans, service members and surviving spouses with a Certificate of Eligibility |
| Gift funds for down payment | Allowed with documentation | Allowed from eligible donors, such as family | Allowed (often not needed with $0 down) |
★ marks the program with the edge on that feature.
*Figures reflect 2026 program guidelines from FHFA, HUD and the Department of Veterans Affairs and are for educational purposes only. This is not a commitment to lend or an offer of specific terms. All loans are subject to credit approval, underwriting guidelines, property eligibility and program availability, and lender requirements may be stricter than program minimums. Not all applicants will qualify. FLO Mortgage, Company NMLS #1835856. Equal Housing Opportunity.
FAQ
FHA loan questions, answered
What credit score do I need for an FHA loan?
HUD allows FHA loans with credit scores as low as 500. A score of 580 or higher qualifies for the minimum 3.5% down payment, while scores from 500 to 579 require 10% down. Lenders may set higher minimums, so ask a FLO loan officer what applies to your situation.
How much do I need for a down payment on an FHA loan?
The minimum is 3.5% of the purchase price with a credit score of 580 or higher, or 10% with a score from 500 to 579. Your down payment can come from savings, a documented gift or an approved down payment assistance program.
How much is FHA mortgage insurance?
FHA loans have an upfront mortgage insurance premium of 1.75% of the base loan amount, which is usually financed into the loan, plus an annual premium. Most 30-year FHA loans pay 0.50% to 0.55% of the balance per year, collected monthly.
Can I remove mortgage insurance from an FHA loan?
If you put down 10% or more, annual MIP ends after 11 years. With less than 10% down, it lasts for the life of the loan. Many homeowners refinance into a conventional loan once they have enough equity to remove mortgage insurance.
What is the FHA loan limit in 2026?
For a one-unit home, the 2026 FHA loan limit is $541,287 in most counties and up to $1,249,125 in high-cost areas. Limits are higher for 2 to 4 unit properties and vary by county.
Can I use an FHA loan to buy a duplex or fourplex?
Yes. FHA loans can finance 2 to 4 unit properties as long as you live in one of the units as your primary residence. Projected rent from the other units may help you qualify.
How soon after bankruptcy or foreclosure can I get an FHA loan?
FHA generally requires two years after a Chapter 7 bankruptcy discharge and three years after a foreclosure, with re-established credit. Exceptions may be possible for documented extenuating circumstances.
Is FHA only for first-time home buyers?
No. FHA loans are available to first-time and repeat buyers alike, as long as the home will be your primary residence and you meet credit, income and property guidelines.
This is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, property eligibility and program availability. Lender requirements may be stricter than the program minimums described here. Not all applicants will qualify. Figures reflect 2026 program guidelines and may change without notice. FLO Mortgage is licensed in Florida, Georgia, Michigan, North Carolina, Tennessee and Texas. Company NMLS #1835856. Equal Housing Opportunity. Licensing & Disclosures.
Local, licensed help
Talk an FHA loan through with a FLO loan officer
Every FLO Mortgage loan officer can walk you through this program, run the numbers for your situation and compare it with your other options. Have questions? Call our main office at (386) 882-9980.
Related loan options
Compare Loan Programs
See conventional, FHA and VA side by side and find the best fit.
Learn more →🏠Conventional Loans
Flexible terms, removable PMI and options for second homes and investment property.
Learn more →🇺🇸VA Loans
$0 down and no monthly mortgage insurance for eligible veterans and service members.
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