FHA Loans
Government-backed financing with low down payments, down payment assistance programs, renovation loans, and credit scores as low as 500. Built for first-time buyers, credit-challenged borrowers, and anyone who needs flexible qualifying.
Last updated: April 2026
Key Facts
FHA loans are government-insured mortgages designed for borrowers with lower credit scores or limited down payment funds. Minimum 3.5% down with a 580+ credit score. Available for primary residences only (1-4 units). Require both upfront and annual mortgage insurance premium (MIP).
What Is an FHA Loan?
FHA loans are insured by the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (HUD). Because the government insures these loans, lenders can offer more flexible qualifying guidelines and lower down payment requirements.
This makes FHA one of the most popular loan programs for first-time homebuyers, borrowers with lower credit scores, or anyone who wants to keep more cash in their pocket at closing. If you have stronger credit and want to compare options, take a look at our conventional loan program. Already have an FHA loan? The FHA Streamline Refinance is one of the fastest and simplest refinance programs available - minimal documentation, no appraisal required, and often no income verification needed.
FHA also offers powerful specialty programs most borrowers do not know about. The FHA 203(K) lets you buy a fixer-upper and finance the renovations in the same loan. The FHA $100 Down program is available on HUD-owned properties. And the Good Neighbor Next Door (GNND) program gives teachers, law enforcement, firefighters, and EMTs 50% off HUD home list prices.
For borrowers who need help with the down payment, we offer multiple down payment assistance (DPA) programs including CalHFA, Chenoa Fund, state bond programs, and FHA 100% CLTV DPA - programs designed to reduce or eliminate your out-of-pocket costs at closing.
Through Lumin Lending, I have access to multiple FHA investors, which means I can compare rates and find you a competitive deal for your specific credit profile and financial situation. If you are a veteran or active-duty service member, be sure to explore our VA loan program for even better terms including zero down payment.
Key Benefits
3.5% Down Payment - Or Even Less
A very low down payment option. On a $400,000 home, that means just $14,000 down. With down payment assistance programs, you may be able to reduce or eliminate your out-of-pocket costs entirely.
Down Payment Assistance (DPA)
Multiple DPA programs can help cover your down payment and closing costs: CalHFA, Chenoa Fund, state bond programs, and FHA 100% CLTV DPA options. These programs are designed to make homeownership accessible when savings are limited.
Credit Scores as Low as 500
Standard FHA requires 580 for 3.5% down, but we also have sub-580 FHA options available down to 500 with 10% down. If your credit needs work, FHA is still a path to homeownership.
FHA 203(K) Renovation Loans
Want to buy a fixer-upper? The FHA 203(K) program lets you finance both the purchase price and the cost of renovations in a single loan, with the same low down payment requirements as standard FHA.
FHA $100 Down Payment
The FHA $100 Down program is available for HUD-owned properties (REO), allowing qualified buyers to purchase with just $100 down. A powerful option for finding value in HUD listings.
Good Neighbor Next Door (GNND)
Law enforcement officers, teachers, firefighters, and EMTs can purchase HUD homes at 50% off the list price through the GNND program. Combined with FHA financing, this is one of the strongest deals in homebuying.
Gift Funds Allowed
Your entire down payment can come from a gift from a family member, employer, or approved down payment assistance program.
Streamline Refinance Option
Already have an FHA loan? The FHA Streamline Refinance lets you lower your rate with minimal documentation and no appraisal required.
Flexible Debt-to-Income Ratios
FHA guidelines allow higher debt-to-income ratios than conventional loans, making it easier to qualify even with existing debts.
Who Is This For?
FHA loans are built for borrowers who need a more accessible path to homeownership. If conventional guidelines feel out of reach, FHA might be the answer.
- First-time homebuyers who want a low down payment and flexible qualifying
- Borrowers with credit challenges including scores from 500 to 660 - sub-580 FHA options are available
- Buyers who need down payment help through CalHFA, Chenoa Fund, bond programs, or FHA 100% CLTV DPA
- Fixer-upper buyers who want to finance purchase and renovations together with FHA 203(K)
- Teachers, law enforcement, firefighters, and EMTs eligible for the Good Neighbor Next Door program at 50% off HUD listings
- Existing FHA borrowers looking to refinance and lower their rate via FHA Streamline
- Borrowers with higher debt ratios who need more flexibility in qualifying
FHA vs Conventional Loans
| Feature | FHA Loans | Conventional Loans |
|---|---|---|
| Minimum credit score | 580 (3.5% down) or 500 (10% down) | 620+ |
| Minimum down payment | 3.5% | 3% (first-time) to 5% |
| Mortgage insurance | MIP - upfront 1.75% + annual (life of loan for most) | PMI - removable at 80% LTV |
| Property types | Primary residence only (1-4 units) | Primary, second home, investment |
| Loan limits | Set by county (FHA limits) | Conforming limits (higher) |
| Debt-to-income | Up to 57% with compensating factors | Up to 45-50% |
| Ideal for | Lower credit, limited savings, first-time buyers | Good credit, want PMI removal, investment property |
| Seller concessions | Up to 6% of purchase price | 3-9% depending on down payment |
Frequently Asked Questions
What is the minimum credit score for an FHA loan?
What is FHA MIP?
Can I use an FHA loan for investment property?
What are FHA loan limits?
How is FHA different from conventional?
Have more questions? Visit our complete FAQ page covering all loan programs, or check the mortgage glossary for definitions of common terms.
Related Loan Programs
Conventional Loans
Traditional financing with as little as 3% down. Competitive rates for purchase and refinance.
Learn moreVA Loans
Zero down payment and no PMI for eligible veterans and active-duty service members.
Learn moreLearn More
First-Time Homebuyer Guide 2026
Step-by-step guide for first-time buyers navigating the home purchase process.
Read articleFHA vs. Conventional Loans
Compare FHA and conventional side by side to find the right fit.
Read articleDown Payment Assistance Programs
DPA programs that can reduce or eliminate your out-of-pocket costs.
Read articleRates and program availability may vary based on the state or region in which the financed property is located. This is not a credit decision, an offer, or a commitment to lend. Program restrictions apply.
Ready to Get Started?
Whether you are buying your first home or refinancing an existing FHA loan with the Streamline program, I can help. Apply online or let me walk you through the process.