02 · Loan program

FHA.

Government-insured by the Federal Housing Administration, designed for buyers without 20% down or with credit that's still recovering. The trade is mortgage insurance for the life of the loan — but the door opens earlier.

Talk it through Run your numbers
3.5%
min down payment
580+
credit score
MIP
for life of loan

Figures are program guidelines, not an offer of credit — your rate, APR, and payment depend on your full application. Not a commitment to lend.

The trade

Access now, for a cost later.

FHA opens the door at a 580 score and 3.5% down. The trade is mortgage insurance that usually lasts the life of the loan — most borrowers refinance to Conventional once they reach 20% equity.

580
minimum score
3.5%
minimum down
Life
of-loan MIP
· The structure

How it's built

MIP
A one-time 1.75% upfront fee that rolls into the loan, plus monthly insurance — 0.55% a year for most buyers. Life of the loan below 10% down; at 10%+ down it ends after 11 years. Or refinance to Conventional at 20% equity.
Loan types
15- or 30-year fixed. ARMs with 1-, 3-, 5-, 7-, or 10-year initial fixed periods exist, but the fixed is the workhorse.
Loan limits
$541,287 baseline for 2026 in most counties; higher in expensive metros. Maricopa County sits just above it at $546,250.
Down payment
3.5% with credit score 580+. 10% required for credit 500–579. Below 500 is not eligible.
Property types
Primary residence only. No investment properties or second homes. Owner-occupied 2–4 unit allowed.
Closing timeline
30–45 days typical. The FHA appraisal is stricter than Conventional and can add a week if repairs are flagged.
· What you'll need

Qualifying

Credit score
580+ for the 3.5% down option. 500–579 requires 10% down. With multiple borrowers, the file runs on the lowest score among them.
Debt-to-income
Most files go through FHA's automated scorecard, which approves higher ratios when the rest of the file is strong. The manual baseline is 31/43 — stretching to 40/50 with two compensating factors. Scores under 580 are capped at 31/43, full stop.
Income docs
Same as Conventional — two years of W-2s and pay stubs. Self-employed needs two years of returns.
Reserves
None required for a 1–2 unit primary through the automated underwrite. Manually underwritten files need one month of payments; 3–4 unit properties need three.
Gift funds
The entire 3.5% can be gifted — by family, your employer or labor union, a close friend with a documented relationship, a charity, or a government homebuyer program. Gift letter and paper trail required.
Employment
Two years steady employment preferred, but FHA is more flexible than Conventional on job changes and gaps.
· Straight talk

Not for you if you're buying an investment property or second home — FHA is primary-residence only, and the mortgage insurance follows the loan for life.

When a loan I offer isn't right for you, I'll say so — and point you to the one that is.

· Common questions

FAQ

Why FHA instead of Conventional?
Lower credit threshold (580 vs 620) and smaller down payment options. The trade is MIP for the life of the loan — that's the cost of the access.
Can I refinance out of FHA later?
Yes. Once you hit 20% equity, refinancing to Conventional drops the MIP. That's the standard FHA exit strategy.
Are there income limits on FHA?
No — FHA doesn't cap income. (USDA does.) FHA is open to any income level that qualifies.
What's the FHA appraisal looking for?
Safety, security, soundness, and continued marketability — a floor, not a standard of finish. 4000.1 names cosmetic items that are not required: cracked window glass, holes in screens, a dripping faucet, handrails that aren't a safety threat, and interior paint in a post-1978 house. Peeling paint only forces repairs on pre-1978 homes, or outside where it exposes the surface to the elements.
Can I use FHA for a fixer-upper?
Yes — via the FHA 203(k) renovation loan. Rolls the purchase and renovation costs into one loan, one closing.
Can my parents help me qualify?
Yes, twice over. A family member can co-borrow without living in the home and you keep the 3.5% down option — a non-family co-borrower pushes the required down to 25%. And the down payment itself can be a gift.
Does paying rent on time count for anything?
It can. First-time buyer, 620+ score, twelve months of on-time rent of $300 or more — that history can be fed into the automated underwrite as a positive factor. Renting well is evidence you'll pay a mortgage well.
How do I get rid of MIP?
If you put 10%+ down, MIP drops at year 11. Otherwise, refinance to Conventional once you have 20% equity.
· Questions left?

Ask me directly.

Six quick taps tell you which loan I’d start with, nothing pulled, nothing saved. Or text me and we start there. I read every text myself, usually within minutes during the day. About FHA loans, or anything else.

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