Question 1

What credit score do I need for an FHA loan?

Accepted Answer

FHA loans require a minimum credit score of 580 for a 3.5% down payment, or 500-579 for a 10% down payment. These are FHA minimums; individual lenders may set higher thresholds, commonly 620. FHA loans are specifically designed for borrowers who may not qualify for conventional financing.

Question 2

What is FHA mortgage insurance and how long do I pay it?

Accepted Answer

FHA loans require an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount (usually rolled into the loan) plus an annual MIP of 0.55% paid monthly. If you put down less than 10%, MIP lasts the entire loan term. With 10% or more down, MIP drops off after 11 years. This differs from conventional PMI, which ends at 80% LTV.

Question 3

What are FHA loan limits for 2026?

Accepted Answer

FHA loan limits for 2026 range from a floor of $524,225 in low-cost areas to a ceiling of $1,209,750 in high-cost areas. Limits vary by county and are based on local median home prices. You can look up your county-specific limit on HUD's website.

Question 4

Can I use an FHA loan for a second home or investment property?

Accepted Answer

No. FHA loans are restricted to primary residences only. You must move into the property within 60 days of closing and live there as your main home. FHA loans cannot be used for vacation homes, rental properties, or house-flipping. However, you can purchase a multi-unit property (up to 4 units) if you live in one of the units.

Question 5

Is an FHA loan better than a conventional loan?

Accepted Answer

FHA loans are generally better for buyers with lower credit scores (below 680) or smaller down payments because they offer lower rates for those profiles. Conventional loans are usually better for buyers with good credit (700+) and at least 5% down, because conventional PMI is cheaper and can be removed sooner. Many borrowers start with FHA and refinance to conventional once they build equity and credit.

Question 6

Can I roll the FHA upfront mortgage insurance premium into the loan?

Accepted Answer

Yes, the 1.75% UFMIP is almost always financed into the loan balance rather than paid at closing. On a $300,000 base loan, the UFMIP of $5,250 is added to make a total loan of $305,250. This increases your monthly payment slightly but avoids a large upfront cost.

Home Price	$350,000.00
Down Payment (3.5%)	- $12,250.00
Base Loan Amount	$337,750.00
Upfront MIP (1.75%)	+ $5,910.63
Total Loan Amount (with UFMIP)	$343,660.63
LTV Ratio	96.5%
Principal & Interest	$2,172.17
Annual MIP Rate (0.55%)	$154.80
Property Tax	$320.83
Homeowners Insurance	$125.00
Total Monthly Payment	$2,772.80
Total Interest Over Life of Loan	$438,320.19

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FHA Loan Breakdown

FHA MIP Details

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