Backed by the Federal Housing Administration, FHA loans let buyers in with 3.5% down and credit scores as low as 580. They're a powerful first step into ownership — but the mortgage insurance is permanent unless you refinance out, so the long-term math matters.
Who qualifies
580+ credit for 3.5% down, 500–579 with 10% down, debt-to-income up to 50% with compensating factors. Bankruptcy and foreclosure waiting periods are shorter than conventional.
What it costs
1.75% upfront mortgage insurance premium (financed into the loan) plus 0.55%–0.85% annual MIP. On a $300k loan, that's roughly $140/month in MIP on top of your principal and interest.
When to choose FHA
Credit under 680, down payment under 5%, or DTI above 45%. Otherwise, run the conventional comparison — conventional often wins above 700 credit because PMI drops at 80% LTV.
Use our free calculators to apply this to your situation in seconds.
Frequently asked questions
Can I refinance out of FHA?
Yes. Once you have 20% equity and 680+ credit, refinance to conventional to drop mortgage insurance permanently.
What's the FHA loan limit?
$524,225 in most counties, up to $1.2M in high-cost areas. Check your county limit before assuming you're outside it.