For those that don’t know, FHA home mortgage loans are mortgages insured by the Federal Housing Administration. With this type of loan, borrowers must pay for mortgage insurance which protects the lender in the event a borrower defaults on their debt. This insurance allows for more enticing interest rates and more flexibility when it comes to qualifications, meaning you’ll be less likely denied a loan. FHA mortgages can be an excellent way for first-time buyers to get a loan, especially if their credit is less than perfect. If you are interested in a FHA home mortgage loan, here are some things you should know.


When it comes to getting an FHA loan, the requirements are surprisingly flexible. The first major requirement is in regard to the purpose of the home. An FHA loan cannot be used to buy a second home or a vacation home. The home being purchased for the loan must be the borrower’s primary residence. Additionally, there is of course a credit report check. However, in order to get a mortgage with a down payment as low as 3.5%, the borrower only needs to have a credit score 580 or higher. Lower credit scores may require a down payment of 10%, and individuals with credit scores lower than 500 may not qualify at all. Borrowers must also clear the government’s Credit Alert Interactive Verification Reporting System that tells them when a borrower has defaulted on federal loans before and whether they owe back taxes. Lastly, they must provide documentation of income to ensure that the borrower can make mortgage payments.


  • Must provide documentation of income
  • Must have a minimum credit score of 580
  • Home must be primary residence

Rates and Insurance

Interest rates for an FHA home mortgage loan are often as low as 3.250% for a 30 year mortgage or 2.750% for a 15 year fixed mortgage. APRs can be as low as 3.8% which is an incredible deal compared to normal loans. ARM are another option that come with low interest, but run the risk of increasing after the first 5 years. Generally, monthly payments for a FHA home mortgage loan are less than $2,000. Best of all, annual insurance premiums can run as low as 0.45%.


  • 2.75% interest rate for 15 years
  • 3.25% interest rate for 30 years
  • 3.8% APR

Finding a Lender

Finding a FHA home mortgage lender is not too difficult. All FHA lenders must be approved by the US department of Housing and Urban Development. Almost all major banks in the United States are FHA-approved, making them an easy place to seek an FHA loan. By using the Lending Tree website, you can find local FHA lenders in your area.


  • Offered by all major banks
  • Banks must be FHA approved
  • Use Lending Tree to find local lenders in your area

Top FHA Approved Banks

Wells Fargo, one of the biggest banks in the world, offers both fixed and adjustable rate mortgages. It is available for nearly all income levels and requires less paperwork, especially when refinancing. It also requires less upfront cash and will accept grants and gift money. Bank of America offers fixed rate mortgages at maximum amounts that may vary by county. First Internet Bank is an online lender that provides rates as low as 3.25% and 4.339% APR. Any of these banks would make an excellent choice for a FHA lender.


FHA home mortgages loans are an excellent way for low-income families to have a chance at buying a home. Even if you have a lower credit score, you can get a home for your family with affordable monthly payments. Check out your local FHA approved bank to see your qualifications and get a loan for a new home today.