FHA Loan
An FHA loan is a mortgage insured by the Federal Housing Administration, designed to make homeownership accessible to borrowers with lower credit scores or smaller down payments.
FHA loans require a minimum down payment of 3.5% and allow credit scores as low as 580 in many cases. They also include mortgage insurance premiums (MIP) — both an upfront premium and a monthly premium — for the life of the loan in most cases.
An FHA loan is not a "bad credit loan." It is a flexible program that serves a wide range of borrowers, including first-time buyers and those rebuilding after financial setbacks. However, the long-term cost of MIP should be weighed against other options. Read our comparison of FHA vs. conventional loans in Louisiana.
Why This Matters: FHA loans open doors — but they also carry costs that other programs may not. Comparing FHA to conventional, VA, and USDA options ensures you select the loan that minimizes your total cost over time.
Common question
What is the minimum credit score for an FHA loan?
FHA allows credit scores as low as 580 in many cases, and sometimes lower with a larger down payment. FHA is more flexible than conventional on credit.
Does FHA require mortgage insurance?
Yes. FHA charges both an upfront mortgage insurance premium (MIP) and a monthly MIP. In most cases, the monthly MIP is required for the life of the loan.
Related Topics
Related Mortgage Terms
Thinking FHA might be the right fit? We will walk you through the requirements, costs, and how it compares to other options.
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