FHA is the government-backed program for buyers with imperfect credit, modest savings, or both. 3.5% down, FICO scores from 580, more flexible debt-to-income limits than conventional. Built for the people most lenders make wait.
What brings you here today?
FHA isn't for everyone. It's for people whose situation makes conventional financing difficult — and that turns out to be a lot of people. If you recognize yourself in one of these, FHA is probably your best path.
FHA's 3.5% minimum down is the program's headline feature. On a $400,000 home, that's $14,000 instead of the $80,000 a 20% conventional down would require. You'll pay mortgage insurance — but that's the trade for getting in the door now instead of saving for three more years.
If your FICO sits between 580 and 679, conventional lenders will quote you a rate that punishes the score. FHA quotes the same rate to a 580 borrower as a 750 borrower — government insurance is what underwrites the risk, not your credit pricing tier. Often the best math for borrowers in this band.
Conventional underwriting typically caps debt-to-income at 43–45%. FHA goes to 56.9% with compensating factors (cash reserves, residual income, strong employment history). If your income covers the payment but a car loan or student loans are pushing you over conventional limits, FHA is the program that says yes.
Bankruptcy 2+ years ago. Foreclosure 3+ years ago. Short sale or deed-in-lieu, similar windows. FHA's seasoning periods are roughly half of conventional's. If you've rebuilt and waited the required time, FHA is the program designed to take that history seriously without overpricing it.
Most calculators omit MIP. Most calculators omit taxes and insurance. Ours doesn't — because the number that matters is the one that lands in your account every month, not the one in the brochure. Slide the inputs, watch the real PITI.
An FHA loan typically closes in 30–45 days. We'll walk you through every step. No surprises in week three. No "your file is in underwriting" updates that mean nothing.
60 seconds. Tell us your situation, your credit range, your timeline. No credit pull at this stage. A real LO calls within 1 business hour to discuss program fit.
If FHA fits, we run a soft credit pull and issue your FHA pre-approval letter. You shop with confidence. Sellers take your offer seriously.
House-hunt with your agent. The home must meet HUD's Minimum Property Standards — safe, sound, secure. Your LO will flag concerns before you go under contract.
Once your offer is accepted, FHA appraisal is ordered, your full file goes to underwriting. We collect docs once, structure them right, and clear conditions before they slow you down.
Final walk-through. Wire your closing funds. Sign at the title company. Walk out with keys. Your loan officer is on the call when you sign — not a stranger.
FHA is the right loan for a lot of people. It's not the right loan for everyone. Here's the honest version, split into what FHA gives you and what it costs you in return.
Made-up names, real numbers. These are the kinds of files we close every week. Your situation will differ — but the math works the same way.
Teacher, 6 years W-2 history, 600 FICO from a thin file (no negatives). Saved $14K. House she found is $375,000 in a county at the FHA floor.
Two-income household, $96K combined. Rebuilt to 645 FICO after a 2022 BK. Conventional declined them. FHA took the file at the standard 2-year seasoning window plus 1 year additional buffer.
22-year-old new graduate, $52K salary, 580 FICO. Almost no savings. Used FHA + Alabama Step Up DPA program — second mortgage covered the down payment, gift from grandparents covered closing costs.
Disclosures: Names changed. Numbers reflect actual closing parameters but are illustrative — your file will price differently based on credit, lock timing, and county.
No marketing copy. If a question has a complicated answer, we say so. If a competitor's option is better for your situation, we'll tell you.
FHA's official minimum is 500 FICO. But:
From 500–579, you'll need 10% down. From 580 and up, you can use the program's headline 3.5% down. Below 500, FHA isn't available — you'll need to focus on credit repair before applying.
Most lenders set their own internal floor higher than 500 — often 580 or 620, even if FHA's rules technically permit lower. Land Home goes down to 580 for 3.5% down on standard FHA. If your score is 500–579, call us — we'll evaluate the file.
FHA charges two layers of mortgage insurance: the upfront MIP (1.75% of your base loan amount, financed in) and the annual MIP (currently 0.55% for most 30-year borrowers, divided into 12 monthly add-ons to your payment).
If you put less than 10% down, MIP runs for the life of the loan. If you put 10% or more down, MIP cancels after 11 years.
The "life of loan" rule is FHA's biggest trade-off versus conventional. Conventional PMI cancels automatically at 78% LTV. The way FHA borrowers escape lifetime MIP is to refinance into a conventional loan once they have 20% equity — which usually takes 5–10 years between principal pay-down and home appreciation.
FHA is for primary residences only. You can't use it for an investment property or a second home, and you generally can't have two FHA loans at the same time.
That said, there are exceptions. If you're relocating for work and your existing FHA-financed home is more than a reasonable commute from the new area, you can sometimes get a second FHA loan. Same if your family has outgrown the home you bought as a single buyer. Talk to your LO about your specific situation.
The honest answer: it depends on your credit and down payment.
If you have 700+ FICO and 5% down, conventional is almost always cheaper over the life of the loan — PMI cancels and you're done with mortgage insurance. If you have 580–679 FICO or less than 5% down, FHA usually wins on monthly cost because conventional pricing penalizes lower scores aggressively.
The crossover point sits around 700 FICO + 5% down. Above that, run both side-by-side and the math will tell you. Below that, FHA is usually your answer. We'll run both for you on the call — it's the right way to make the decision.
Single-family detached, townhomes, FHA-approved condos, and 1–4 unit properties (as long as you live in one of the units). Manufactured homes too, with some specific rules around foundation type and "real property" classification.
The home itself must meet HUD's Minimum Property Standards. The FHA appraiser checks for safety, soundness, and security — no peeling paint on pre-1978 homes, no obvious structural issues, working systems. If your dream house needs major repairs, an FHA 203(k) renovation loan bundles purchase + repairs into one mortgage.
FHA's seasoning periods are roughly half of conventional's:
Chapter 7 bankruptcy: 2 years from discharge.
Chapter 13 bankruptcy: 1 year of on-time payments while still in repayment plan (with court approval), or after discharge.
Foreclosure: 3 years from completion date.
Short sale or deed-in-lieu: 3 years.
You'll also need to demonstrate re-established credit — generally at least 2 trade lines reported on time for 12+ months, and no new derogatory activity.
Yes — and this is one of FHA's strongest combinations. Most state housing-finance-agency (HFA) DPA programs are designed to pair with FHA financing.
The DPA program covers some or all of your 3.5% down payment, often as a second mortgage that's forgivable over 5–10 years if you stay in the home, or as a grant with no repayment. Some programs also help with closing costs.
Land Home is a master servicer for 8 state HFA programs, which means we don't just originate the FHA loan — we structure the DPA correctly alongside it. This matters: a poorly-structured DPA can blow up an FHA file at underwriting. We do this all day.
FHA appraisals are stricter than conventional. The appraiser checks two things: market value (same as any appraisal) and HUD's Minimum Property Standards.
MPS items the appraiser flags: peeling paint on homes built before 1978 (lead paint risk), broken windows, missing handrails on staircases, exposed wiring, water-damaged ceilings, missing flooring, signs of foundation movement, non-functional HVAC, water heater safety issues, and property access problems.
If something fails MPS, the seller typically fixes it before closing — or in some cases, you can do an FHA 203(k) rehab loan that bundles the repairs into the mortgage. Your LO will spot likely problems before you go under contract; we don't want surprises in week three either.
No SSN. No hard credit pull. No commitment. Just a real conversation about whether FHA is your right answer — and what your actual numbers look like. That's how this should work.