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FHA Mortgage

An FHA mortgage is a mortgage that is secured by the federal government, specifically the Federal Housing Administration.

Definition of an FHA Mortgage

 

An FHA mortgage is a mortgage that is secured by the federal government, specifically the Federal Housing Administration. Basically, this means that if a borrower quits paying and loses their home in a foreclosure, the government will make sure the lender doesn’t suffer any losses. You don’t actually get your mortgage from FHA; you must use an FHA-qualified lender. Since all lenders must originate their FHA loans based on the same core guidelines, it’s important to compare your mortgage options when getting an FHA loan.

 

Benefits of an FHA Mortgage

 

FHA mortgages have many benefits that can really make the difference for first-time home buyers or buyers with less-than-perfect credit. Some of the benefits of an FHA mortgage include the following:

 

Low Down Payment

FHA mortgages require as little as 3.5 percent down. This is one of the lowest down payments of any loan product currently available. Conventional products typically require between 10 and 20 percent down, so this is a huge benefit to those with a little less cash in the bank.

 

Easier To Qualify

The entire reason the government started the FHA program was to help extend mortgage loans to borrowers during and after the Great Depression. FHA has continued its legacy of putting homeownership within more people’s reach by having broader mortgage guidelines.

 

Assumable

One unique feature of FHA mortgages is that they are assumable. This means that someone may assume your home loan when you sell, if they qualify of course. This is a huge benefit when interest rates rise, as the low interest rate of your FHA mortgage can be assumed by your home’s new owners.

 

Co-Applicant and Gift Funds

For those needing a little extra push to get started, or for those with family members gifting them money, FHA allows for both co-applicants and gift funds. Co-applicants actually qualify for and are responsible for the mortgage with you. While there is no requirement as to who actually pays the mortgage, it must be paid on-time each month, or you will both be held liable. Gift funds can be used for a portion or all of your down payment for your FHA mortgage.

 

Other FHA Mortgage Considerations

 

Mortgage Insurance

Mortgage insurance comes in two forms: upfront and annual, and all FHA loans require both. Upfront mortgage insurance is paid when the loan is originated and equals 1.75 percent of the loan amount. Then, there is an annual mortgage insurance assessed on a monthly basis. The cost of this will vary based on several factors such as loan-to-value ratios and term length and can range from 0.45 percent to 1.05 percent.

 

Property Qualification Standards

While not strict, FHA can’t loan on all properties. It requires that properties meet its Minimum Property Standards (MPS). These standards include things such as a roof with a life of at least 2 more years, no exposed wood outside, and no cracked or broken glass.

 

Maximum Loan Amount

The maximum amount you can borrow on an FHA loan varies by county. Look up your county’s maximum here.

*ARMs are only available as 30-year loans.

Adjustable-Rate Mortgage Eligibility Requirements in 2026

DOWN PAYMENT

3.5% of the final loan amount

TERMS

10, 15, 20, 25, 30* years, fixed and variable

CREDIT SCORE

620 minimum score

MORTGAGE INSURANCE

Yes based on loan product

MAXIMUM LOAN AMOUNT

Yes varies by county

Our Extensive Loan Product Offering Includes:

We leverage advanced lending technology to enhance every stage of the loan journey — from instant calculations and eligibility checks to secure document processing. This platform-driven approach allows us to deliver faster responses while maintaining accuracy and compliance.

  • Conventional Loans (including low down payment options)
  • FHA Loans
  • VA Loans (even for borrowers with credit challenges)
  • USDA Loans
  • Jumbo Loans
  • HELOCs and Home Equity Loans
  • Reverse Mortgages
  • 2-1 Buydowns (help your clients reduce their initial monthly payments)
  • Down Payment Assistance Programs (DPA)
  • Non-QM Loans (for borrowers who don’t fit traditional lending criteria)
  • DSCR Loans (multiple ways to structure for investors)
  • Bank Statement Loans (for self-employed borrowers)
Frequently Asked Questions

FHA Mortgage

What is an FHA Mortgage?
An FHA mortgage is a home loan backed by the Federal Housing Administration (FHA). It’s designed to help buyers who may not qualify for conventional loans due to lower credit scores or smaller down payments. Because it’s government-insured, lenders can offer more flexible qualification guidelines.
Do FHA loans require mortgage insurance?
Yes. FHA loans require Mortgage Insurance Premium (MIP): Upfront MIP (paid at closing or rolled into loan) Annual MIP (paid monthly) In many cases, MIP lasts for the life of the loan unless you refinance into a conventional mortgage later.
Who is an FHA Mortgage best suited for?
FHA loans are ideal for: First-time homebuyers Borrowers with lower credit scores Buyers with limited savings Higher debt-to-income ratios They may not be ideal for buyers putting 20% down or those seeking to avoid long-term mortgage insurance.

Interest Rates, APR’s & programs are illustrations subject to change at any time. These do not constitute a ‘Loan or Good Faith Estimate’ for payments and closing costs. Not all applicants will qualify. APR may vary by product type. Consumer is not obligated to use any party mentioned. Lender Express Mortgage is not affiliated with FHA, VA, USDA or the Federal Government. Lender Express Mortgage, LLC supports Equal Housing Opportunity (www.nmlsconsumeraccess.org) | (888) 286-0367 | 2500 S Power Rd Bldg 9 Ste 133, Mesa, AZ 85209. Regulated by the AZ Department of Financial Institutions. Arizona License #MB-1008082, CA #60DBO-140688, CO #MB-1963444, FL #MBR4665, IA #1963444, OR #1963444, PA #79751, TX #1963444. Figure: 7 tac § 80.200(b) consumer wishing to file a complaint against a company or a residential mortgage loan originator should complete and send a complaint form to the Texas department of savings and mortgage lending, 2601 North Lamar, suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department website at www.Sml.Texas.Gov. A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.Sml.Texas.Gov. Above information and content is accurate as of 6/22.