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FHA Loan

These loans are government-backed through the Federal Housing Administration (FHA). They also allow for a down payment of 3.5% or even no down payment when utilizing a down payment assistance program. The county loan limits will determine how much you can borrow. You can find your county loan limits by clicking here. FHA loans are an incredible option for borrowers with a lower credit score and low down payment.

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FHA Loan Highlights

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Competitive Interest Rates
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Down payments as low as 3%
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Zero Point Loans available
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Must have 2 years verifiable self employment income
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Fixed and Adjustable-Rate Options

What Is an FHA Loan?

An FHA Loan is a mortgage insured by the U.S. Federal Housing Administration (FHA).
Private lenders issue the loan, but because it is backed by government insurance, FHA Loans are designed to be more forgiving for borrowers with less savings, lower credit scores, or shorter credit histories.
FHA Loans are meant for primary residences and are popular with first-time homebuyers due to their more lenient qualification standards compared to many conventional mortgages.
At Prestian.ai, we use AI analytics to match you with lenders that offer FHA Loans, estimate your eligibility, and help you understand all associated costs upfront.

Benefits of an FHA Loan

Lower down payment requirements:
FHA Loans allow for down payments as low as 3.5% of the purchase price for borrowers with qualifying credit scores.
This makes home ownership more attainable for those who haven’t accumulated large savings.
More flexible credit requirements:
If your credit score is below conventional loan requirements, an FHA Loan may still be an option, provided other aspects of your financial profile are strong.
Government-insured safety net:
Because the FHA insures a portion of the loan, lenders are more willing to accept higher risk, which can translate into approval opportunities for more borrowers.
More forgiving of past credit issues:
FHA programs are more likely than many conventional loans to consider borrowers who have had previous financial difficulties (bankruptcy, foreclosure) if there has been sufficient recovery and current financial stability.
Prestian.ai’s advantages:
Our system uses AI to analyze your credit, down payment options, and local FHA loan limits, helping to simulate your monthly payments (including FHA Mortgage Insurance Premiums), compare lenders, and choose the option that minimizes long-term cost.
Lower down payment requirements:
FHA Loans allow for down payments as low as 3.5% of the purchase price for borrowers with qualifying credit scores.
This makes home ownership more attainable for those who haven’t accumulated large savings.
More flexible credit requirements:
If your credit score is below conventional loan requirements, an FHA Loan may still be an option, provided other aspects of your financial profile are strong.
Government-insured safety net:
Because the FHA insures a portion of the loan, lenders are more willing to accept higher risk, which can translate into approval opportunities for more borrowers.
More forgiving of past credit issues:
FHA programs are more likely than many conventional loans to consider borrowers who have had previous financial difficulties (bankruptcy, foreclosure) if there has been sufficient recovery and current financial stability.
Prestian.ai’s advantages:
Our system uses AI to analyze your credit, down payment options, and local FHA loan limits, helping to simulate your monthly payments (including FHA Mortgage Insurance Premiums), compare lenders, and choose the option that minimizes long-term cost.
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Who Qualifies for an FHA Loan & What Are the Limits?

Who Qualifies

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To qualify for an FHA Loan, you must meet certain eligibility rules related to income, occupancy, and property, as well as lender-specific criteria. Here are general guidelines and limits:

What are the Limits

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Occupancy requirement:
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Loan limits vary by county:
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Income and steady employment:
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Debt-to-Income Ratio (DTI):
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Credit Score Requirements
Down Payment Requirements

FHA Loan Credit Score Requirements

Credit Score Requirements

  • A credit score of 580 or higher generally qualifies you for the lowest FHA down payment requirement (3.5%).
  • If your credit score is between 500 and 579, many FHA lenders will still approve your loan, but you’ll need a higher down payment (typically around 10%).
  • Lenders may impose stricter credit score minimums than FHA’s basic rules, depending on property condition, down payment, income stability, past credit issues, etc.
  • Prestian.ai’s platform assesses not just your credit score but your entire credit history, recent credit behavior, existing debt, and other metrics to present you lenders whose policies align with your profile.

Prestian.ai’s platform assesses your full financial profile, including credit history, income stability, existing debts, and other risk factors, to match you with lenders who have credit policies that suit you.

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FHA Loan Down Payment Requirements

Down Payment Requirements

  • With a credit score of 580 or above, FHA Loans require a down payment of 3.5% of the purchase price.
  • With a credit score between 500 and 579, the required down payment increases, often to 10%.
  • Employing gift funds or approved down payment assistance is often allowed for FHA Loans, subject to lender rules and documentation.
  • FHA loan costs also include mortgage insurance premiums (MIP): an upfront fee (often ~ 1.75% of loan amount) and ongoing monthly MIP payments. These premiums add to the monthly cost and must be factored in.
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FAQs on FHA Loans

Can I use an FHA Loan if my credit score is below 580?
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What is the FHA Mortgage Insurance Premium (MIP)?
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Are there FHA loan limits?
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Do FHA Loans allow gift funds for down payments?
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Will FHA Loans work for people who had bankruptcy or foreclosure?
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