Do FHA loans have mortgage insurance for life?

Most FHA loans originated today carry the annual mortgage insurance premium for the life of the loan, and the common way to end it is to refinance into another loan type once you qualify. Terms depend on the loan-to-value and term at origination.

Can I use an FHA loan for a rental property?

No. FHA financing is for primary residences. You can buy a 2 to 4 unit property with FHA and rent out the other units as long as you occupy one of them.

Do FHA loans take longer to close?

Not inherently. Timelines depend more on appraisal scheduling, property condition and how quickly documentation is returned than on the program itself.

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FHA Loans

FHA loans are insured by the Federal Housing Administration and designed to expand access to homeownership. They are frequently used by first time buyers and by borrowers whose credit or debt ratios do not fit conventional guidelines, and they are limited to primary residences.

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Who it is designed for

First time buyers with limited down payment funds
Buyers rebuilding credit or with a shorter credit history
Buyers whose debt to income ratio is higher than conventional guidelines allow
Buyers purchasing a 2 to 4 unit property they will live in

Eligible occupancy types

Primary residence only

Down payment or equity

3.5% minimum down payment for qualifying credit profiles. Gift funds from eligible sources are widely permitted.

Major benefits

Flexible credit guidelines compared with conventional financing
Gift funds may cover the down payment for eligible borrowers
Allows 2 to 4 unit purchases when you occupy one unit
FHA 203(k) renovation financing is available for homes needing work

Important considerations

FHA charges an upfront mortgage insurance premium plus an annual premium
On most current FHA loans the annual premium remains for the life of the loan unless you refinance
County loan limits apply
The appraisal includes minimum property standards, so deferred maintenance can matter

How qualification generally works

Credit is reviewed with FHA specific guidelines and any lender overlays
Steady, documentable income and an acceptable debt to income ratio
Funds to close verified through statements or documented gift
FHA appraisal meeting minimum property requirements

Documents commonly requested

Photo ID and Social Security number for each borrower
Most recent pay stubs covering a full 30 day period, if you receive W2 wages
W2s and/or federal tax returns for the most recent years requested
Two months of asset statements for accounts used for down payment and reserves
Current mortgage statement, homeowners insurance and property tax information on properties you own
Explanations for large or non payroll deposits

Frequently Asked Questions

Related programs and next steps

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We will review your documents, compare the realistic options, and give you a written preapproval you can use with confidence. Nothing on this page is a commitment to lend.

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