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.
3.5%
min down payment
580+
credit score
MIP
for life of loan
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, and soundness. Peeling paint, broken windows, missing handrails — anything that affects habitability gets flagged and must be fixed before closing.
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.
Four quick taps tell me where you are — or skip the form and just call, text, or email. No follow-up sequence either way. About FHA loans, or anything else.
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