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FHA loan

A lower bar to clear, when credit is the obstacle.

An FHA loan is government-insured, so lenders can accept a lower credit score and a smaller down payment. You pay for that flexibility through mortgage insurance.

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At a glance

FHA loan

Minimum down3.5%
Minimum credit580, or 500 with 10% down
Upfront MIP1.75% of the loan
OccupancyOwner-occupied, up to 4 units
Today's rateCall for today's rate
Start pre-approval

Is an FHA loan right for you?

It is the flexible option, and flexibility has a running cost.

An FHA loan is insured by the Federal Housing Administration. That backing lets lenders accept lower credit scores, smaller down payments and higher debt-to-income ratios than a conventional loan would allow.

The trade-off is mortgage insurance, and it has two parts. An upfront premium of 1.75% is added to your loan balance at closing. An annual premium of 0.55% in most cases, and up to 0.75% on larger balances, is split into monthly payments — about $137 a month on a $300,000 loan at 0.55%. If you put less than 10% down, that monthly premium stays for the life of the loan. It does not come off the way conventional PMI does.

Compare with a conventional loan
What you'll need
Down payment3.5% at 580+, or 10% at 500 to 579
Credit score580 minimum
Debt-to-incomeMore flexible than conventional
Upfront MIP1.75%, added to the loan
Annual MIP0.55% typical, up to 0.75%
OccupancyOwner-occupied, up to 4 units
Loan limitSet by county — call for the Richmond figure

From question to keys, in four steps

1

Pre-approval

We check the credit and income picture first.

2

House hunt

FHA has property standards, so we watch condition.

3

Appraisal and underwriting

An FHA appraiser checks value and safety.

4

Closing

Sign, fund, and get the keys.

Worth comparing

FHA is not automatically the cheaper option

If your score is under 680 and savings are tight, FHA is often the better path. If your score is 700 or above and you can put 5% to 10% down, conventional often costs less over time because the mortgage insurance can be removed.

We run both with your actual numbers so you can decide with full information rather than a sales pitch.

A white clapboard house with black shutters and a covered front porch

Buying with an FHA loan?

Use our in-house agents and half the buyer-agent commission comes back to you — about $6,000 on a $400,000 home at a 3% buyer-agent commission.

See Bundle & Save

FHA loan questions

What credit score do I need for an FHA loan?
580 gets you the 3.5% down payment. Between 500 and 579 you can still qualify, but the down payment rises to 10%. We will tell you where you stand before you apply.
How does FHA mortgage insurance work?
There are two parts. An upfront premium of 1.75% is added to your loan balance at closing. An annual premium of 0.55% in most cases, and up to 0.75% on larger balances, is divided into monthly payments. If you put less than 10% down, the monthly premium stays for the life of the loan and cannot be removed by reaching 20% equity.
Should I choose FHA or conventional?
It depends on your credit score, your down payment and how long you plan to stay. Below 680 with limited savings, FHA is usually better. At 700 or above with 5% to 10% down, conventional often costs less because the insurance is removable. We model both.
Can I buy a rental with an FHA loan?
Partly. FHA is for a home you will live in, but that can be a two- to four-unit building where you occupy one unit and rent the others. It is a common Richmond first purchase. For a true second home or a property you will not live in, you would look at conventional.

Find out what you qualify for

Pre-approval is free, quick, and commits you to nothing.

Get pre-approvedBook a call
Or call (804) 593-0344