FHA Loan Calculator

Who FHA Loans Are For

FHA loans are insured by the Federal Housing Administration, which lets lenders offer easier credit terms because the FHA backs the loan if the borrower defaults. They're built for first-time buyers, buyers with lower credit scores, and buyers who haven't saved a conventional down payment. Roughly 12% of U.S. home purchase loans are FHA in a typical year — much higher among first-time buyers.

The two headline benefits are the 3.5% minimum down payment and the credit-score floor of 580 (or 500 with 10% down). The trade-off is the mortgage insurance premium (MIP), which sticks around far longer than conventional PMI.

Down Payment & Credit Score Grid

FHA Loan Requirements Checklist

Everything below is an FHA rule. Individual lenders add their own overlays on top — most commonly a 620 or 640 credit minimum — so clearing this list gets you eligible, not automatically approved.

• Credit score of 580+ for the 3.5% down payment, or 500–579 with 10% down.
• Down payment of at least 3.5%, which may come from your own savings, a documented gift from a family member, or an eligible down payment assistance program.
• Debt-to-income ratio generally under 43%. FHA allows higher with compensating factors like cash reserves or a long stable job history. Check yours against the FHA limit with the DTI calculator.
• Verifiable, steady income, typically two years of employment history documented with W-2s, tax returns, or profit-and-loss statements.
• The home must be your primary residence. FHA does not finance investment properties or second homes.
• The property must pass an FHA appraisalagainst HUD's minimum property standards — the home has to be safe, sound, and secure. This is stricter than a conventional appraisal and can require repairs before closing.
• The loan must fall within your county's FHA limit (see below).
• Mortgage insurance is mandatory — 1.75% upfront plus annual MIP, with no option to waive it at any down payment.
• No delinquency on federal debt, including defaulted student loans or unpaid taxes, which lenders screen for through CAIVRS.
• Waiting periods after derogatory events: generally two years after a Chapter 7 bankruptcy discharge and three years after a foreclosure, though exceptions exist for documented hardship.

How FHA MIP Works (UFMIP + Annual MIP)

FHA mortgage insurance has two parts. The first is the upfront MIP (UFMIP), a one-time 1.75% premium on the base loan amount, charged at closing. Almost every borrower rolls UFMIP into the loan instead of paying cash — it adds about $5,250 to a $300,000 loan.

The second is the annual MIP, paid monthly. HUD's standard rates as of 2026 are about 0.50%–0.55%of the loan balance per year for 30-year loans (the higher rate applies above 95% LTV), and lower rates for 15-year loans. On a $300,000 FHA loan that's roughly $125–$140 per month at the start, declining slowly as the balance shrinks.

The drop-off rule is the part that catches borrowers off guard. If you put down less than 10%, MIP stays for the entire loan term — there is no automatic cancellation at 80% LTV the way conventional PMI works. If you put down 10% or more, MIP drops off after 11 years. That asymmetry is why so many FHA borrowers eventually refinance into conventional once they have enough equity.

MIP vs PMI: What's the Difference?

MIP (FHA) and PMI (conventional) both protect the lender against borrower default, but they behave very differently. PMI is risk-rated — your credit score and LTV move the rate, and it cancels automatically once your balance hits 78% of the original home value. MIP is flat-rated regardless of credit and either sticks for the loan's life (if down < 10%) or drops at year 11.

For strong-credit borrowers, conventional PMI is almost always cheaper and exits sooner. For weaker-credit or lower-down-payment borrowers, FHA is often the only realistic option even at the higher long-term cost.

FHA vs Conventional Loan Comparison

The trade is easier qualification for costlier, longer-lasting mortgage insurance. Where you land depends almost entirely on your credit score and how much you can put down.

The assumability row is worth a second look. Because an FHA loan can be taken over by a qualified buyer at its original rate, an FHA mortgage locked in at a low rate becomes a genuine selling point years later — something a conventional loan almost never offers. Price a conventional equivalent with the PMI calculator and compare the two monthly payments directly.

FHA Loan Limits in 2026

FHA sets its limits by county, not by state— so there is no single “FHA limit for Texas” or “for California.” Every county is assigned a number tied to its local median home price, bounded by a national floor and ceiling. Most states contain counties at both extremes: California runs from the floor in its inland counties to the ceiling in the Bay Area, and New York does the same between its rural north and the New York City metro.

For 2026, the floor is 65% and the ceiling 150% of the $832,750 national conforming loan limit. Both apply to FHA case numbers assigned on or after January 1, 2026.

Alaska, Hawaii, Guam, and the U.S. Virgin Islands get limits adjusted upward above the ceiling to account for higher construction costs. Because the number that matters is your county's, look it up directly in HUD's FHA Mortgage Limits lookup. If the home you want exceeds it, your options are a larger down payment to bring the loan under the cap, a conventional loan, or a jumbo loan.

Is an FHA Loan Right for You?

FHA is a tool for getting into a home you couldn't otherwise finance today. It is rarely the cheapest loan over thirty years. That trade is worth it for some buyers and not others.

If you're close to the line, the deciding number is usually how long you'll hold the loan. Under five years, FHA's lifetime MIP costs little in absolute terms and the easier approval is nearly free. Past ten years, life-of-loan MIP compounds into real money and conventional pulls ahead — unless you refinance out. Size the gap between your savings and 10% down with the down payment calculator, and check what price you actually qualify for with the affordability calculator.

When to Refinance Out of FHA

The most common FHA exit move is a refinance into a conventional loan once you have 20% equity. That removes MIP entirely. The math works when you have at least 24–36 months of remaining MIP payments and the conventional rate isn't materially worse than your FHA rate. Use the refinance calculator to model the break-even with closing costs.

If rates have moved against you (your FHA rate is well below current market), an FHA streamline refinance can lower your rate while keeping you in FHA — MIP stays, but at a lower interest rate. Many borrowers do a streamline first, then refinance to conventional later.