FHA Home Loans
FHA Loans That Make Homeownership Reachable
Insured by the Federal Housing Administration, FHA loans open the door for buyers with modest savings or a credit history that is still taking shape. The Smith Mortgage Group helps you confirm eligibility, put gift funds to work and move from pre-approval to keys with a single point of contact.
What It Is
How FHA financing works
An FHA loan is a mortgage made by an approved lender and insured by the Federal Housing Administration. That federal insurance protects the lender if a borrower defaults, which is what allows the program to accept smaller down payments and more flexible credit than many conventional loans.
The trade-off is mortgage insurance. FHA borrowers generally pay an upfront mortgage insurance premium, which is usually rolled into the loan, plus an annual premium divided into monthly payments. For many buyers, that cost is well worth getting into a home years sooner than they otherwise could.
Our branch writes FHA purchase loans and FHA refinances, including the FHA streamline refinance for existing FHA borrowers. If the home you love needs work, ask about renovation financing on our construction and renovation loans page.
Who It Fits
FHA is often a strong match when you
- Are buying your first home and want to keep upfront cash requirements low
- Have a credit score that is improving but not yet where conventional pricing shines
- Have a past bankruptcy, foreclosure or short sale and have completed the required waiting period
- Plan to use a documented gift from family toward your down payment or closing costs
- Want to live in a condo, townhome or a 2–4 unit property while renting out the other units
- Carry a higher debt-to-income ratio that still fits within program guidelines
State and local down payment assistance programs may be available as well — we can help you check eligibility.
Key Benefits
What an FHA loan offers buyers
3.5% minimum down
With qualifying credit, FHA requires a down payment of 3.5%, and that money can come from approved gift sources.
Forgiving credit standards
FHA guidelines can accommodate lower scores and past credit events that might stall a conventional application.
Multi-unit owner occupancy
Live in one unit of a duplex, triplex or fourplex and use the other units' rent to help with the payment, subject to guidelines.
Simpler future refinancing
Existing FHA borrowers may qualify for a streamline refinance with reduced paperwork when rates move in their favor.
Requirements
FHA qualifying basics
These general guidelines give you a starting point. Approval depends on qualification, underwriting and current FHA program rules.
| Requirement | General FHA guideline |
|---|---|
| Down payment | 3.5% with qualifying credit; a larger down payment may be needed with lower scores |
| Occupancy | The home must be your primary residence |
| Mortgage insurance | Upfront premium plus an annual premium paid monthly |
| Property condition | The home must meet FHA minimum property standards confirmed by an FHA appraisal |
| Loan size | Must fall within FHA limits for the county where the home is located |
| Credit events | Waiting periods apply after bankruptcy, foreclosure or short sale |
Compare
FHA compared with conventional and USDA
Three popular paths for budget-conscious buyers, each with a different trade-off.
| Feature | FHA | Conventional | USDA |
|---|---|---|---|
| Typical minimum down | 3.5% | As low as 3%–5% for qualified buyers | 0% for eligible borrowers |
| Credit flexibility | High | Moderate | Moderate |
| Mortgage insurance | Upfront and annual MIP | Removable PMI | Upfront and annual guarantee fees |
| Location limits | None | None | Eligible rural and suburban areas only |
See whether a conventional mortgage or a zero-down USDA loan could beat FHA for your situation, or model all three in the loan comparison tool.
Steps
Your path to closing on an FHA loan
Talk through your numbers
Share your income, savings and credit picture. There is no hard credit pull to get started, and we will flag any issues worth fixing first.
Get pre-approved
After we verify documents, you receive an FHA pre-approval, often the same day for qualified borrowers.
Shop with confidence
Look for homes within your approved range, keeping in mind that the property must pass FHA appraisal standards.
Underwriting and appraisal
We order the FHA appraisal, submit your file and help you clear conditions quickly.
Close on your home
Review the final figures with our team, sign your documents and pick up your keys.
FAQ
FHA loan FAQs
What credit score do I need for an FHA loan?
FHA guidelines allow a 3.5% down payment with qualifying credit, and borrowers with lower scores may still be eligible with a larger down payment. Final approval depends on your full credit history, income and underwriting review, so we look at the complete picture rather than a single number.
Can I use gift money for an FHA down payment?
Yes. FHA allows documented gifts from eligible sources, such as family members, to cover the down payment and closing costs. The giver typically signs a gift letter, and we verify the transfer of funds.
Does FHA mortgage insurance ever go away?
Depending on your down payment and loan terms, FHA annual premiums may last for many years or the life of the loan. Many homeowners later refinance into a conventional loan to eliminate mortgage insurance once they have built equity. Our refinance calculator can help you time that move.
How long after bankruptcy can I get an FHA loan?
FHA sets specific waiting periods after a bankruptcy, foreclosure or short sale, and the length depends on the type of event and circumstances. Once the waiting period is met and credit has been re-established, FHA is often one of the quickest routes back to owning.
Can I buy a fixer-upper with FHA financing?
A standard FHA loan requires the home to meet minimum property standards at closing. If the property needs significant repairs, renovation financing may let you roll improvement costs into the mortgage.
Can I buy a duplex with an FHA loan?
Yes, as long as you live in one of the units as your primary residence. Properties with up to four units may qualify, and projected rent from the other units may help you qualify, subject to guidelines.
Keep Exploring
Related resources
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Questions about fha home loans?
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