Loan types
FHA loans for a smaller down payment.
FHA loans are insured by the Federal Housing Administration. They are a common way to buy a primary home when a conventional loan would ask for more down payment or a higher credit score.
Who it is for
- Buyers purchasing a home they will live in
- Borrowers who have a limited down payment
- Homeowners refinancing an existing FHA loan
How it usually works
- FHA guidelines often allow 3.5% down when credit meets the program minimum. Scores under that range can require a larger down payment, and lenders can set their own overlays.
- Mortgage insurance is part of an FHA loan. There is an upfront premium, which can often be financed, and a monthly premium.
- The property has to meet FHA condition standards. Some fixer-uppers need repairs before the loan can close.
What to have ready
- Photo ID and Social Security number
- Income and employment documents
- Bank statements for the down payment and reserves
- A property you intend to occupy as your primary home
Guidelines change, and lenders add their own rules. The description above is a starting point, not a quote and not an approval.