FHA Loans — Low Down Payment Home Loans
An FHA loan is a mortgage insured by the Federal Housing Administration. Because the federal government carries the insurance, lenders can offer more flexible credit guidelines and a lower down payment than a conventional loan — often making it the right loan for first-time buyers, buyers rebuilding credit, or anyone who needs to keep cash on hand at closing. RICH Home Loans is a licensed FHA-approved broker in Colorado, Texas, Kansas, and Missouri.
FHA loan highlights
- Down payment as low as 3.5% with a 580+ FICO
- Flexible debt-to-income (DTI) guidelines vs. conventional
- Seller can contribute up to 6% toward closing costs
- Gift funds allowed for the entire down payment
- Manual underwriting available when AUS returns a refer
- Assumable — a future buyer may be able to take over your mortgage
- Streamline refinance available if you already have an FHA loan
Who FHA is a good fit for
FHA isn't just for first-time buyers — you can use it more than once, as long as the home is your primary residence. It's typically the best option when:
- Your credit score is between 580 and 660 and you'd pay a lot for conventional mortgage insurance
- Your DTI is higher than conventional will allow (FHA often goes to 50%+)
- You're using gift funds for the down payment
- You're buying a 2- to 4-unit property and plan to live in one unit (FHA allows house-hacking)
FHA mortgage insurance (MIP)
FHA charges two mortgage insurance premiums: an upfront MIP (typically 1.75% of the loan amount, rolled into the loan) and an annual MIP paid monthly. Annual MIP stays for the life of the loan when you put less than 10% down. For many buyers, the right move is to use FHA to get into the home, then refinance to a conventional loan once you've built enough equity to remove MI.
FHA loan limits
FHA loan limits are set by HUD at the county level and update each year. The national floor and ceiling change annually; your specific county may fall anywhere in between. Use searchconformingloanlimits.com to look up FHA and conforming limits for any U.S. county, or call us and we'll pull it for yours.
Frequently asked questions
What's the minimum down payment on an FHA loan?
3.5% of the purchase price with a credit score of 580 or higher. Scores from 500 to 579 require 10% down. There's no prepayment penalty.
What credit score do I need?
580+ qualifies for 3.5% down. Below 580 but at or above 500 qualifies for 10% down. We also look at rent history, payment patterns, and compensating factors — not just the score.
Do FHA loans require mortgage insurance?
Yes — both an upfront MIP (usually rolled into the loan) and a monthly MIP that typically runs for the life of the loan when you put less than 10% down. You can remove FHA MIP by refinancing into a conventional loan once you have sufficient equity, which is often a smart play 2–5 years in.
What's the FHA loan limit in my county?
FHA loan limits are set by HUD at the county level and update each year. The 'floor' for low-cost areas is lower than the high-cost ceiling. Use HUD's FHA lookup or call us — we pull the current limit for your specific county.
Related
- VA loans — 0% down for eligible veterans and service members
- Conventional loans — the typical alternative once you have 5–20% down and solid credit
- Refinance — including FHA-to-conventional refinances to remove MIP
- Cities we serve — Denver, Kansas City, Dallas, Houston, Austin, San Antonio and more
Ready to start?
Run your FHA scenario at Banking After Hours — full PITI + DTI, no credit pull. Or call Rich directly.