FHA Loans
Buying a home can feel out of reach if you’re dealing with a limited down payment, a lower credit score, or unique financial circumstances—but FHA loans were designed to help. Backed by the Federal Housing Administration, these loans offer more flexible requirements, making them a popular choice for first-time homebuyers and anyone working to rebuild their financial foundation.
Whether you’re stepping into homeownership for the first time or looking for a loan that fits your unique situation, FHA loans offer an accessible path toward owning a home.
What is an FHA Loan?
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a government agency that helps make homeownership more attainable. These loans allow for lower down payments and more lenient credit requirements than conventional loans, which makes them especially appealing to first-time buyers or those with past credit challenges.
But FHA loans aren’t just for one type of buyer—they can be a smart solution for anyone who wants more flexibility when it comes to qualifying for a mortgage.
Is an FHA Loan Right for You?
An FHA loan might be a great option if:
An FHA loan may not be ideal if you have strong credit and can make a down payment of 20% or more, you want to avoid paying mortgage insurance, or you are buying a home that exceeds FHA loan limits.
How FHA Loans Work
FHA loans work similarly to other mortgages, but with some key differences that offer flexibility to buyers.
Key features of FHA loans:
- Low down payment requirements (as little as 3.5%)
- Lower minimum credit scores (often 580 or above)
- Mandatory Mortgage Insurance Premiums (MIP) on all loans, regardless of down payment
- Government backing offers more security to lenders
| Feature | FHA Loan | Conventional Loan |
|---|---|---|
| Minimum Down Payment | 3.5% | 3-5% (but 20% to avoid PMI) |
| Credit Score Requirement | As low as 580 | Typically 620 or higher |
| Mortgage Insurance | Required on all FHA loans | Required only if down payment < 20% |
| Flexibility for Unique Situations | Higher | Lower |
How Does the FHA Loan Process Work?
Here's how the FHA loan process typically unfolds:
- Apply with an FHA-approved lender like Sirva Mortgage
- Provide financial documentation including income, credit score, and employment details
- Get approved with flexible credit and down payment requirements
- Pay an upfront and annual Mortgage Insurance Premium (MIP) that protects the lender
- Close on your home with confidence—FHA loans are fully backed by the federal government
Already have an FHA loan? You may also be eligible for an FHA Streamline Refinance, which allows qualified borrowers to refinance without the hassle of a full application.
FHA Streamline Refinance
If your FHA mortgage is more than six months old and you're looking to lower your monthly payments, the FHA Streamline Refinance might be the perfect fit. It’s a simplified process with fewer documentation requirements and faster approval.
Benefits of an FHA Streamline Refinance:
- No home appraisal typically required
- No paystubs, bank statements, or employment verification
- No credit score check
- Quick and easy closing process
- Potential refund of your upfront mortgage insurance premium (if your current loan is less than three years old)
