FHA insures qualifying mortgages against covered lender losses under program conditions. Participating lenders make and underwrite the loans; FHA insurance is not a borrower approval or a guarantee that every default loss is reimbursed.
When to compare FHA
For scored purchase borrowers, minimum decision scores of 580 or above generally permit up to 96.5% LTV, and 500–579 up to 90%, subject to the applicable program and lender requirements. Recent bankruptcy, foreclosure, income, debt and property conditions need separate review; these numbers alone do not establish approval or suitability.
Why people get FHA over conventional
- Credit requirements: FHA has its own credit-history and underwriting rules. Compare the actual applicable requirements rather than assuming it accepts every past credit issue or is always easier than conventional financing.
- DTI: Apply the applicable FHA manual or automated underwriting rules and lender requirements. Conventional automated underwriting may also permit up to 50%; neither program guarantees approval at a stated ratio.
- Assumption: A qualified buyer may assume an eligible FHA loan under program and servicer conditions. Obtain required approval and confirm the existing borrower’s written release; assumption does not guarantee a faster sale or higher price.
Property requirements
The property must satisfy applicable HUD requirements. Repairs, eligible rehabilitation products and other permitted remedies depend on the program and actual conditions. Other loan programs also have property requirements; do not assume a universal ranking of strictness.
FHA loan limits vary by county and change annually. Figures above are general program rules, not a quote — confirm current numbers with a licensed loan officer.