Flexible on credit and debt, but the insurance is the price. Know it going in.
FHA loans are insured by the Federal Housing Administration, which lets lenders approve borrowers with thinner credit, higher debt ratios, and smaller down payments than conventional guidelines allow. In exchange, every FHA loan carries mortgage insurance, upfront and monthly.
- Have a credit score in the 580s to 660s
- Need to buy with 3.5% down and a higher debt ratio
- Have a recent credit event and have re-established credit
- Are buying a 2–4 unit home you’ll live in
When FHA wins, and when it doesn’t.
- Your credit score is below about 680 and conventional pricing adjustments bite
- Your debt-to-income ratio is high; FHA’s automated approvals can go higher than conventional
- You have 3.5% down but not 5%
- You’re buying a 2–4 unit property to live in: 3.5% down, and rental income from the other units can help you qualify
- You’re assuming an existing FHA loan with a below-market rate (FHA loans are assumable by qualified buyers)
- Your credit is strong: conventional PMI is cheaper and cancellable, FHA MIP usually isn’t
- You can put 10% or more down, where conventional pricing improves sharply
- The condo you want isn’t on FHA’s approved list and single-unit approval isn’t available
- The property has condition issues: FHA appraisals enforce minimum property standards
- You’re buying a second home or a rental you won’t live in; FHA is owner-occupied only
What the insurance actually costs.
1.75% of the base loan amount, almost always financed into the loan rather than paid in cash.
Charged monthly. For most 30-year loans with less than 5% down it’s 0.55% of the loan amount per year; slightly less with 5%+ down or shorter terms. confirm current HUD schedule
With less than 10% down, for the life of the loan. With 10% or more down, 11 years. The usual exit is refinancing into a conventional loan once you have 20% equity.
Set by county each year, between a national floor and ceiling. Broward County’s limit is above the floor; confirm the current Broward/Miami-Dade/Palm Beach limits before relying on a number.
3.5% down with a 580+ score; 10% down with 500–579. Lenders may add their own minimums. Jared’s lender overlays to be confirmed.
The appraiser checks minimum property requirements: safety, soundness, security. Peeling paint on older homes, missing handrails, and roof condition come up often.
A realistic scenario, with made-up numbers
A buyer with a 640 score and $15,000 saved looks at a $400,000 home. With 3.5% down ($14,000) the FHA base loan is $386,000; the 1.75% upfront premium adds about $6,755, financed. Monthly MIP at 0.55% runs roughly $177 per month at the start.
Conventional at 3% down would need a 3%-down program eligibility and would carry PMI priced for a 640 score, which at that credit tier can cost more per month than FHA’s MIP. Once this buyer’s score and equity improve, a conventional refinance can drop the insurance entirely. That is the typical FHA arc.
Documents are standard; explanations matter more.
FHA underwriting weighs the story behind credit events, so letters of explanation carry real weight.
- Photo ID and Social Security verification
- 30 days of pay stubs; two years of W-2s
- Two years of tax returns if self-employed
- Two months of bank statements
- Gift letter if the down payment is a gift (FHA allows gifts for the full 3.5%)
- Letters of explanation for late payments, collections, or job changes
- Bankruptcy or foreclosure papers if applicable (waiting periods apply: generally 2 years after Chapter 7, 3 years after foreclosure)
- Lease agreements for a 2–4 unit purchase
Common questions
Can I get rid of FHA mortgage insurance?
Is FHA only for first-time buyers?
What about condos?
What is an FHA Streamline?
Can the seller pay my closing costs?
Find out whether FHA is your cheapest path, or just the easiest.
Share roughly where your credit and down payment stand and Jared will compare FHA with conventional for you.
- No credit pull, no obligation
- Not an application; no guarantee of approval or terms
- Rather talk? Call or text 954-649-0020
FHA can be the right bridge. Make sure it isn’t a trap.
Jared prices it against conventional so you see the whole cost.