How to Apply for an FHA Loan

Learn More About Eligibility and FHA Loan Applications

FHA loans help make buying or refinancing a home more affordable in communities across the United States. The benefits of FHA loans include competitive interest rates, low down payments, flexible credit scores, and easier refinancing with the streamline program.

Applying for an FHA loan is similar to the way you apply for other mortgages. There are differences, however. Read on to learn more about how to apply for an FHA loan!

Confirm You Qualify for an FHA Loan

Any U.S. citizen who meets the credit, income, and financial requirements can qualify for an FHA loan. These requirements include having a steady income and established credit, money for a down payment, and a debt-to-income ratio that meets our standards. Learn more about FHA loan requirements.

Understand FHA Loan Limits

The Federal Housing Administration sets a limit on the amount of money you can borrow with an FHA loan, which can limit the price of houses you may be able to buy. These limits vary by county and currently range between $498,257 and $1,149,825 for a single-family home. Learn more about 2024 FHA loan limits.

Apply for an FHA Loan

You apply for an FHA loan the same way you apply for other mortgages. You’ll fill out an application and provide credit, income, and financial documents. These are the same steps for any new loan, whether you are buying a house or refinancing to get cash from your home’s equity with an FHA loan. Learn more about applying for a mortgage.

Simpler Applications for FHA Loan Refinances

When you are refinancing an FHA loan, you are often able to use the streamline program which has less paperwork and faster closings. At Freedom Mortgage, we can often take your refinance application on the phone. Learn more about FHA streamline refinances.

Make a Down Payment

When you are buying a house with an FHA loan, you are required to make a down payment. The minimum down payment depends on your credit score. When you have a credit score of 580 or better, you can make a down payment as low as 3.5% of the price of the home. If you want to buy a house that costs $300,000 then a 3.5% down payment would equal $10,500.

Understand FHA Property Requirements

You can only buy or refinance a primary home with an FHA loan, which is the house where you will live most of the time. There are also minimum health and safety standards the house must meet to qualify for financing. Learn more FHA appraisal requirements.

Understand the Mortgage Insurance Premiums

FHA loans have two kinds of mortgage insurance premiums. There is an upfront mortgage insurance premium (UFMIP) equal to 1.75% of the principal loan amount you need to pay when you buy or refinance a home. For example, if you are borrowing $200,000 with an FHA loan then your upfront premium would be $3,500.

There are also annual mortgage insurance premiums (MIP) that typically cost between 0.15% and 0.75% of the loan amount. You pay these premiums as part of your monthly mortgage bill.

On March 20, 2023, the Department of Housing and Urban Development (HUD) reduced mortgage insurance premiums for new borrowers. They estimate this will save new FHA homebuyers an average of $800 each year. Please note that these savings do not apply to homeowners with existing FHA loans.

Experienced Freedom Mortgage Loan Advisors can help you understand how your down payment, mortgage insurance premiums, and other factors might affect your monthly payment. Check out our FHA loan mortgage calculator to learn more.

Check the Closing Costs

Closing costs for FHA loans average between 3% and 4% of the price of the home according to the U.S. Department of Housing and Urban Development. These costs might include FHA loan application fees, discount points, and the upfront mortgage insurance premium. Learn more about FHA loan closing costs.

Sign Your Disclosures and Attend Closing

You’ll need to sign your disclosures and attend the closing of your FHA loan, just like you do for other kinds of home loans. Learn more about our mortgage application process.

Freedom Mortgage is proud to be a top FHA lender in the United States, Inside Mortgage Finance, Jan.–Jun., 2024.

Last reviewed and updated June 2024 by Freedom Mortgage.