Author bio section

I am the author of this blog and also a top-producing Loan Officer and CEO of InstaMortgage Inc, the fastest-growing mortgage company in America. All the advice is based on my experience of helping thousands of homebuyers and homeowners. We are a mortgage company and will help you with all your mortgage needs. Unlike lead generation websites, we do not sell your information to multiple lenders or third-party companies.

Find out about requirements (including credit scores), guidelines, rules, rates, loan limits, how to qualify, and how to apply for an FHA Loan.

This post is limited to qualifying for FHA loans as a home buyer – First Time or repeat. Click on this link if you are interested in reading about FHA Streamline Refinance.

What is an FHA Loan?

Federal Housing Administration (FHA) Loans are insured by Housing and Urban Development (HUD) which allows lenders to offer low downpayment loans to homebuyers like you. FHA loans have been helping people become homeowners since 1934. FHA insures loans for first time home buyer mortgage loan, FHA streamline refinance, FHA regular refinance, Cash-out refinance, and also home purchase by people who are NOT first time home buyers. FHA however doesn’t provide loans directly. You need to work with an FHA-approved lender to qualify for the home purchase or refinance loan.

What is the credit score rule for an FHA Loan?

While FHA rules allow for much lower credit scores, most of the lenders require a minimum of 620 Fico score.

What are the FHA Loan Guidelines and Rules?

You need to meet the following basic requirements for qualifying for an FHA loan (this is not an exhaustive guideline and a particular lender may even have their own set of guidelines):

  • The property must be owner-occupied.
  • FHA loans are available for 1-4 unit houses including single-family residences, town-homes, condominiums, and even manufactured homes.
  • A minimum downpayment of 3.5% is required. The downpayment can be gifted from parents, children, siblings, or other close relatives.
  • An impound account is required on all FHA loans. As part of the impound account, payments for property taxes and home insurance are broken down into monthly payments and are paid to the lender along with mortgage payments every month. The lender then makes a payment directly to the county or your home insurance company when it’s due.
  • Two years of employment history is required. However, if you went to school immediately prior to starting your employment, the school years can be counted towards the “two years” requirement as long as your job is in the same field as your education.
  • You should have enough income to meet the maximum debt to income ratio requirement of 43%. In some cases, that ratio can be allowed to as high as 50%.
  • Upfront mortgage insurance (UFMIP) of 1.75% and annual mortgage insurance of 0.45% – 1.05% is required on all FHA loans. For mortgage insurance premium rates and calculator, check this post.
  • FHA offers 30 years fixed, 15 years fixed, and 5 year ARM loan.

What are FHA Loan Limits?

For 2020, the FHA national “floor” loan limit for 1 unit house is $331,760. This means that all counties in the country will at least have this as their loan limit. FHA also classified several counties as “high-cost” meaning the loan limits in those counties are higher than $331,760. The maximum loan limits in some counties can be as high as $765,600 and in other counties, it’s between the floor i.e. $331,760 and the highest loan limit i.e. $765,600. Click here to find out the FHA loan limit for your county.

How to apply for an FHA Loan?

To get an FHA loan you need to work with an FHA-approved lender. If you want to work directly with me to get pre-approved or get a rate quote you can complete the FHA rate quote form here.

Buying Condominiums using FHA loans

Only FHA approved condominiums are eligible for FHA financing. Some townhomes are also classified as condos and hence should be on FHA approved project list. To find out if a condo project is on an approved list or not go to

Other Related Posts:

Complete guide to FHA Streamline Refinance