FHA Loans
Low down payment. Flexible credit. Government-backed confidence.
FHA loans are insured by the Federal Housing Administration, making them one of the most accessible mortgage options available. Designed for borrowers who may not qualify for conventional financing, FHA loans offer lower down payments and more lenient credit requirements. As a direct lender, we streamline your FHA loan from application to closing with no middleman markups.
Who Is This For?
- First-time home buyers with limited savings
- Borrowers with credit scores as low as 580
- Buyers who want a low down payment option
- Borrowers recovering from a past financial hardship
- Buyers purchasing a primary residence
What You Need to Know
Min. Down Payment
3.5%
Min. Credit Score
580
Max DTI
43-50%
Upfront MIP
1.75%
Annual MIP
0.55%
Loan Limits (2026)
Up to $524,225
What to Expect
- 1Minimum credit score of 580 for 3.5% down payment
- 2Minimum credit score of 500 with 10% down payment
- 3Debt-to-income ratio typically below 43% (up to 50% with compensating factors)
- 4Property must be your primary residence
- 5Property must meet FHA appraisal standards
- 6Steady employment history for at least 2 years
- 7Mortgage insurance premium (MIP) required for the life of the loan
Frequently Asked Questions
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration. The FHA does not lend money directly; instead, approved lenders like DirectLender.com originate the loans, and the FHA provides insurance that protects the lender if you default. This insurance allows lenders to offer more favorable terms, including lower down payments and more flexible credit requirements. You pay for this insurance through an upfront mortgage insurance premium (1.75% of the loan amount) and an annual premium (currently 0.55%) split into monthly payments.
You need a minimum credit score of 580 to qualify for the standard 3.5% down payment FHA loan. If your score falls between 500 and 579, you can still qualify but will need to put at least 10% down. Scores below 500 are generally not eligible. Keep in mind that while these are FHA minimums, individual lenders may set higher thresholds. At DirectLender.com, we work with borrowers at the FHA minimum of 580 for the 3.5% down option.
The minimum down payment on an FHA loan is 3.5% of the purchase price if your credit score is 580 or higher. For a $300,000 home, that means you would need $10,500 as a down payment. If your credit score is between 500 and 579, a 10% down payment is required. FHA loans also allow your entire down payment to come from gift funds from family members, employers, or approved down payment assistance programs.
For FHA loans originated after June 3, 2013, with a down payment of less than 10%, mortgage insurance premium (MIP) is required for the entire life of the loan. If you put down 10% or more, MIP can be removed after 11 years. The most common way to eliminate FHA mortgage insurance is to refinance into a conventional loan once you have at least 20% equity in your home. This is one reason many borrowers use FHA to get into a home initially and then refinance later.
FHA loan limits vary by county and are adjusted annually. For 2026, the standard FHA loan limit for a single-family home in most areas is $524,225. In high-cost areas, the ceiling can go up to $1,209,750. You can check the specific limit for your county on the HUD website or ask your DirectLender.com loan officer. If you need to borrow more than the FHA limit in your area, you may want to consider a conventional or jumbo loan instead.
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