An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), designed to help lower- and moderate-income borrowers qualify for home loans. These loans often feature lower down payments and more flexible credit requirements compared to conventional loans.
Key Features of FHA Loans:
- Down Payment: As low as 3.5% for borrowers with a credit score of 580 or higher.
- Credit Score Requirements: Borrowers with credit scores between 500 and 579 may qualify with a 10% down payment.
- Mortgage Insurance: FHA loans require both upfront and annual mortgage insurance premiums to protect lenders against defaults.
Recent Policy Changes:
As of May 25, 2025, the U.S. Department of Housing and Urban Development (HUD) has revised residency requirements for FHA loans. Non-permanent residents are no longer eligible for FHA-insured mortgages.
Considerations:
- Primary Residence: FHA loans are intended for primary residences only; investment properties or second homes do not qualify.
- Property Standards: The property must meet HUD’s minimum property standards to ensure it is safe and livable.
- Loan Limits: FHA sets limits on loan amounts, which vary by region and are generally lower than those for conventional loans.
For more detailed information, you can visit the HUD’s official website or consult with an FHA-approved lender to determine your eligibility and explore current rates.