FHA Loan Calculator

FHA loans are government-backed mortgages insured by the Federal Housing Administration, designed to make homeownership accessible to borrowers with lower credit scores and smaller down payments. Lenders face less risk because the FHA guarantees a portion of the loan, which allows them to offer more favorable terms. Borrowers can qualify with as little as 3.5% down and a credit score of 580, making FHA loans one of the most popular options for first-time homebuyers across the United States.

FHA loans require two types of mortgage insurance: an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, and an annual mortgage insurance premium (MIP) of 0.55% for most loans. The upfront premium is typically financed into the loan balance, while the annual premium is divided by 12 and added to your monthly payment. For loans with less than 10% down originated after June 2013, MIP lasts the entire life of the loan and can only be removed by refinancing into a conventional mortgage.

FHA loans offer lower credit score requirements (580 vs 620) and smaller down payments (3.5% vs 3-5%), but come with mandatory mortgage insurance for the life of the loan. Conventional loans allow PMI removal once you reach 20% equity, which can save thousands over the long term. For borrowers with credit scores above 700 and at least 5% down, a conventional loan often results in lower total costs. FHA loans remain the better choice for buyers with limited savings or credit challenges.

To qualify for an FHA loan, borrowers need a minimum credit score of 580 for the 3.5% down payment option, or 500-579 with 10% down. The property must be a primary residence and meet FHA appraisal standards for safety and habitability. Borrowers must demonstrate steady employment history, typically two years, and maintain a debt-to-income ratio generally below 43%. FHA loan limits vary by county, ranging from $498,257 in low-cost areas to $1,149,825 in high-cost markets.