The upfront premium
You pay an upfront mortgage insurance premium, usually added to the loan.
FHA loans
FHA loans: a smaller down payment and more flexible credit rules.
Made by a private lender and insured by the Federal Housing Administration. Here is how FHA loans work, how the mortgage insurance is paid, how gifts and down payment assistance can help, and the FHA Streamline refinance.
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- Direct, licensed mortgage lender
- NMLS #103098
- Equal Housing Lender
What would you like to do?
Pick the one closest to you. A few short questions follow, and a licensed loan officer gets back to you.
Get a quoteReady for the full application? Apply online
Fidelity Residential · NMLS #103098 · Equal Housing Lender
- Direct, licensed lenderNMLS #103098. Check our licences on NMLS Consumer Access.
- A licensed loan officerA real person reviews your file and answers your questions.
- For the home you live inFHA loans are for your main residence.
- Apply online or by phoneStart a quote, apply online or call 732-686-9999.
The basics
What an FHA loan is
An FHA loan is made by a private lender and insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development (HUD). The government does not lend the money; it insures the lender against loss. In return, you pay mortgage insurance.
Because of that insurance, FHA loans accept smaller down payments and lower credit scores than most conventional loans. The home must be your main residence.
FHA sets a loan limit for each county, and the home must meet HUD’s safety and soundness standards, which the appraiser checks.
Homes FHA can finance
- A house of one to four units, when you live in one of them
- A condominium in a project FHA has approved, or one that receives single-unit approval
- A manufactured home that meets HUD’s rules
Mortgage insurance
FHA mortgage insurance, explained
Every FHA loan carries two mortgage insurance premiums. Your loan estimate shows both in dollars.
The annual premium
An annual premium is paid in twelve parts with your monthly payment. With a larger down payment it ends after a set number of years; with a smaller one it lasts for the life of the loan. Refinancing into a different loan later is one way some owners remove it.
Down payment
Paying the down payment and closing costs
FHA lets you use more than your own savings for the money you bring to closing.
Your own money
Savings, checking and other accounts you can document. The source of large deposits is checked.
A documented gift
A gift from a relative or another allowed donor can cover the down payment. You will need a gift letter and a record of the money moving.
Down payment assistance
A down payment assistance program from a government agency that FHA allows can help with the down payment and, in some programs, closing costs. The assistance is usually a second loan with its own terms.
See our down payment assistance programsThe seller may also pay part of your closing costs, up to a limit HUD sets.
How it works
The steps to an FHA loan
Talk and get a quote
A loan officer reviews your income, debts, savings, credit and price range, and explains FHA mortgage insurance and the loan limit for your county.
Apply
After your application, the lender orders an FHA case number, pulls credit and runs the file through FHA’s automated scorecard, which lists the documents needed.
The home is appraised
An FHA appraiser values the home and checks it against HUD’s safety standards. Repairs may be required before closing.
Underwriting and closing
An underwriter checks your documents. You review your closing disclosure and sign. Property taxes and insurance are usually paid through an escrow account.
Already own a home?
FHA refinances and renovation loans
FHA Streamline refinance
Already have an FHA loan? The FHA Streamline refinance needs less paperwork and no appraisal, and it must give you a real benefit.
Refinancing your mortgageRate-and-term and cash-out
FHA can also replace another mortgage to change the rate or the length of the loan, or replace it with a larger one and pay you the difference in cash. The home must be your main residence.
Cash-out refinancesFHA 203(k) renovation loans
Buy or refinance a home and pay for repairs or renovation with the same FHA loan. The money for the work is paid out as it is done.
Renovation loans
Documents
What documents you need
The automated findings list exactly what your loan needs. Most buyers can start with these.
- Recent pay stubs and your W-2 forms
- Tax returns, and if you are self-employed, a year-to-date profit and loss statement
- Bank statements showing the money for the down payment and closing costs
- A gift letter if family is helping with the down payment
- Your signed purchase contract, once you have one
- Photo identification for everyone on the loan
Questions
Common questions about FHA loans
Are FHA loans only for first-time buyers?
No. Any buyer can use an FHA loan, as long as the home will be their main residence and the loan fits FHA’s rules and the county loan limit.
Does the government lend me the money?
No. A private lender makes the loan, and the Federal Housing Administration insures it.
Can a permanent resident get an FHA loan?
Yes. Lawful permanent residents can qualify on the same terms as U.S. citizens.
Can I get an FHA loan after a past credit problem?
Sometimes. FHA sets waiting periods after events such as a bankruptcy or foreclosure, and the lender looks at how your credit has been handled since. Tell your loan officer about it at the start.
Where can I get help with the down payment?
A documented gift or an approved government assistance program can help. See our down payment assistance programs.
Do you lend in my state?
Fidelity Residential is licensed in many states. The full, current list is on NMLS Consumer Access (opens in a new tab), or call us at 732-686-9999.
Ready to talk about an FHA loan?
Get a quote, apply online, or talk it through with a licensed loan officer.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, income, property and underwriting review and are subject to change without notice.