Residential Loans

FHA Loans

Government-backed loans designed to make homeownership accessible for first-time buyers and those with lower credit scores or smaller down payments.

What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration. Because the government backs these loans, lenders can offer more favorable terms to borrowers who might not qualify for conventional financing.

FHA loans are especially popular with first-time homebuyers due to their lower down payment requirements and more flexible qualification standards.

Key Benefits

  • Down payment as low as 3.5%
  • Credit scores as low as 580 may qualify
  • More lenient debt-to-income requirements
  • Gift funds allowed for down payment
  • Available for 1-4 unit properties
  • Streamline refinance options available

Who This Loan Is For

First-time homebuyers and borrowers with smaller down payments or lower credit scores. FHA is also a strong option when gift funds help cover the down payment or when conventional guidelines are too strict.

Typical Requirements

  • • Credit score 580+ for 3.5% down (500–579 requires 10% down)
  • • Debt-to-income ratio up to roughly 43–50%
  • • Primary residence only — owner-occupied 1–4 unit properties
  • • Mortgage insurance premium (MIP) required
  • • Gift funds allowed for down payment (subject to underwriting)

Key Terms to Know

FHA Mortgage Insurance (MIP)
Insurance the FHA requires on every loan. An upfront premium plus an annual premium rolled into your monthly payment.
Debt-to-Income (DTI)
Monthly debt payments divided by gross monthly income. FHA allows higher ratios than many conventional loans.
Loan-to-Value (LTV)
The loan amount divided by the property value. FHA sets a maximum LTV based on your credit score and down payment.
Gift Funds
Money given by an eligible donor toward your down payment. FHA permits gift funds when properly documented.
Streamline Refinance
A simplified FHA refinance with reduced documentation, available when you already have an FHA loan.

See our FAQ and loan resources for more definitions and checklists.

Related Loan Programs & Resources

Conventional Loans

No mortgage insurance with 20% down.

VA Loans

Zero-down financing for veterans.

Hard Money Loans

Asset-based, fast-closing financing.

How It Works

The ASBCLF application process.

Required Documents

Checklist by loan type.

FAQ

Common financing questions answered.

Ready to Get Started?

Let us help you navigate your FHA loan options and get you into your new home.