Call us at (909) 270-4647 · NMLS #820270 · Serving 38 States!
FHA Loan Guide
Make homeownership possible with an FHA loan
FHA loans are government-backed mortgages designed to help more borrowers qualify for home financing especially first-time and moderate-income buyers. Learn how they work, who they’re for, and what you need to qualify.
Typical FHA clients: first-time buyers, those with limited savings, or borrowers rebuilding credit.
See if an FHA loan fits you
Share a few details and a Neighborhood Home Loans advisor will walk you through FHA options and payments.
No commitment, no impact to your credit score for submitting this request.
FHA 101
What is the Federal Housing Administration (FHA)?
The Federal Housing Authority (FHA) is a government agency within the U.S. Department of Housing and Urban Development (HUD). Instead of lending money directly, FHA insures mortgages made by approved lenders like Neighborhood Home Loans. That insurance reduces the lender’s risk, allowing more flexible guidelines for borrowers.
Government-backed support
FHA doesn’t lend you money it insures your loan. This government backing is what allows lower down payments and more flexible credit standards.
Built for accessibility
FHA was created during the Great Depression to expand access to safe, affordable home financing and it still plays that role today for millions of buyers.
Used by real people every day
FHA loans account for a significant share of first-time home purchases in the U.S., especially in higher-cost markets and for low-to-moderate income households.
Why buyers choose FHA
How FHA loans benefit our clients
FHA loans are designed to meet buyers where they are making it possible to purchase a home with less money down, more flexible credit guidelines, and competitive interest rates.
- Low down payment: as little as 3.5% down for qualified borrowers.
- More flexible credit: FHA may allow lower credit scores than many conventional loans.
- Easier qualification: debt-to-income (DTI) limits can be more forgiving.
- Gift funds allowed: family or eligible programs can help cover your down payment and closing costs.
- Assumable loans: a future buyer may be able to assume your FHA loan, which can be a big advantage if rates rise.
- Streamline refinance options: easier refinancing process for eligible existing FHA borrowers.
Best for: first-time buyers, buyers with limited savings for a down payment, or those with previous credit challenges.
Our advisors will compare FHA alongside other options (like conventional, VA, or USDA loans) so you can see the trade-offs clearly: monthly payment, required cash to close, and long-term costs.
Before you apply
Important things to know about FHA loans
FHA loans are powerful tools, but they have specific rules and trade-offs. Understanding them helps you decide whether FHA is the right path or just one option to compare.
Tip: FHA isn’t just for first‑time buyers. You can use an FHA loan again, as long as it will be your primary residence and you meet the guidelines.
Mortgage insurance (MIP)
All FHA loans require mortgage insurance premiums (MIP). There is usually an upfront premium (often rolled into the loan) and an annual premium built into your monthly payment. MIP protects the lender if you stop making payments.
In many cases, MIP lasts for at least 11 years, and sometimes for the life of the loan unless you refinance into a different type of mortgage later.
Property and appraisal rules
The home must meet FHA’s minimum property standards. The FHA appraisal looks at value and basic safety, soundness, and security issues. Homes needing significant repairs may not qualify until issues are addressed.
FHA loans are generally for primary residences only not second homes or investment properties.
Loan limits and occupancy
FHA sets a maximum loan amount for each county based on local housing prices. These loan limits vary by area and by property type (1-unit vs. 2–4 units).
You must plan to live in the home as your primary residence, typically within 60 days of closing, and generally for at least one year.
Qualifying for FHA
FHA loan eligibility requirements
Guidelines can change over time, and lenders may have their own overlays. Below is a simplified look at typical FHA requirements your Neighborhood Home Loans advisor will confirm the most current standards for your situation.
Credit & history
• Many lenders allow FHA with scores starting in the 580–620 range for 3.5% down.
• Lower scores may be possible with higher down payments.
• Recent bankruptcies, foreclosures, or late payments may require waiting periods, but FHA is often more forgiving than conventional loans.
Income & employment
• Stable, documentable income (W-2, 1099, or self-employed) is required.
• Typically at least 2 years of income history in the same line of work is preferred.
• Debt-to-income (DTI) ratios can be more flexible, often allowing higher DTIs than conventional loans with strong compensating factors.
Down payment & funds
• Minimum down payment is generally 3.5% of the purchase price for qualifying credit scores.
• Funds can come from your own savings, eligible gift funds, or approved assistance programs.
• You’ll also need money for closing costs, though seller credits and lender credits may help.
Citizenship & property
• U.S. citizens, permanent residents, and certain non-permanent residents may be eligible.
• The home must be your primary residence and meet FHA property standards.
• Loan amount must fall within FHA loan limits for the county and property type.
FHA questions, answered
Common FHA loan FAQs
Every buyer’s situation is different. These answers cover the basics, but our team can walk through your exact numbers in just a few minutes.
Is an FHA loan only for first-time homebuyers?
No. FHA loans are commonly used by first-time buyers, but they’re also available to repeat buyers who plan to live in the home as their primary residence and meet FHA guidelines. You typically can’t have more than one FHA loan at the same time unless certain exceptions apply.
Can I use an FHA loan to buy a fixer-upper?
Yes, through special programs such as the FHA 203(k) rehabilitation loan. This option lets you finance both the purchase price and eligible repair/renovation costs in a single mortgage, subject to program rules and contractor bids.
How does FHA mortgage insurance compare to private mortgage insurance (PMI)?
FHA’s mortgage insurance premiums (MIP) are set by the program and apply to all FHA loans, regardless of down payment size. Conventional loans use private mortgage insurance (PMI), which can sometimes be removed when you reach enough equity. We’ll compare both options side-by-side so you can see which costs less over time.
Can I refinance out of an FHA loan later?
Yes. Many borrowers use FHA to get into a home and later refinance into a conventional loan, especially if home values rise, credit improves, or they want to remove monthly mortgage insurance. FHA also offers streamline refinances for eligible existing FHA borrowers who want to reduce their rate with minimal paperwork.
See your FHA numbers in minutes
Tell us about your goals, income, and savings. We’ll show you estimated FHA payments, cash-to-close, and how FHA compares to other loan options all with no obligation.
Or call us directly at (909) 270 4647 to talk through your FHA options today.
Bobadilla Home Loans
Bringing you expert mortgage solutions for a smarter, smoother path to homeownership. Let’s open doors together!
28200 Highway 189 F240 #17&18
,Lake Arrowhead, CA 92352
(909) 270-4647 [email protected]
Licensing & disclosures
Regulated by IDFPR – Residential Mortgage Banking
555 West Monroe St., Ste 500
Chicago, Illinois 60661
844-768-1713
For licensing information, go to www.nmlsconsumeraccess.org
Bobadilla Finance Team Home Loans, NMLS#820270/1660690
Corporate Address: 3100 West Ray Rd Ste 201 Office #209 Chandler, AZ 85226
For more information, NMLS Consumer Access Link: https://nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/1660690
**NOTICE* - This is not a commitment to lend or extend credit. Restrictions may apply. Information and/or data is subject to change without notice. All loans are subject to credit approval. Not all loans or products are available in all states
Sample content: © 2024 Bobadilla Home Loans. All rights reserved.
Sample content: Equal Housing Lender logo or icon placeholder