FHA Loans

How Much Might You Need Down?

For a standard FHA purchase, 3.5% down may be available with a qualifying credit score of 580 or higher. FHA rules generally require 10% down for scores from 500–579. Lender requirements can be stricter. The down payment is only part of the cash needed to buy.

How FHA Financing Works

The lender makes and services the loan while FHA provides mortgage insurance. The lender still reviews credit, documented income, debts, assets and the property. Individual lender standards may be more restrictive than program minimums.

Look Beyond the Down Payment

An FHA offer may include upfront and ongoing mortgage insurance, in addition to principal, interest, taxes and homeowners insurance. The way mortgage insurance ends depends on the loan terms. Ask Adam to show the total payment and cash to close, including how an FHA scenario differs from conventional financing.

• Is the upfront insurance financed or paid in cash?
• How much is the monthly insurance?
• Are there property repairs or appraisal conditions to resolve?

When to Revisit the Choice

A better credit profile or larger down payment later can change the comparison, but refinancing has costs and is not guaranteed. Choose a loan that works on today’s terms rather than assuming a future refinance.

How Does FHA Mortgage Insurance Change?

Standard FHA purchase loans have an upfront premium of 1.75% of the base loan. The annual premium depends on the loan amount, term and loan-to-value ratio. Putting more down may reduce it, but does not simply eliminate it at 20% down.

• For terms longer than 15 years, the annual rate drops at 5% down within each base-loan tier.
• With 10% down or more, annual MIP generally lasts 11 years; with less, it generally lasts for the mortgage term.

Put the Guide to Work