Top renovations that add value before selling your home
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Many first-time homebuyers choose FHA (Federal Housing Administration) loans due to their lower down payment requirements and flexible credit standards. These government-backed mortgages are also an option for move-up buyers, providing an opportunity to secure financing even if they have limited equity from their previous home sale, face credit challenges, or need more flexible debt-to-income ratios.
In addition to home purchases, FHA loans can be used to refinance existing mortgages, providing flexibility for homeowners at different stages of their financial journey.
Pros:
- Low down payment
- Competitive interest rate
- Flexible credit guidelines for people with lower credit scores or recent negative credit events
- Allows for higher debt-to-income ratios
- Low down payment on multi-unit properties
- Allows use of non-occupant co-borrower if needed to qualify
- Gift funds may be used for down payment
- Non-traditional credit history can be used
Cons:
- Greater mortgage insurance costs apply, including an upfront mortgage insurance premium—paid at closing or rolled into the loan balance—as well as monthly mortgage insurance premiums for the life of the loan when putting 10% or less down at closing
- If the Upfront Mortgage Insurance is rolled into the loan (which is most common), it takes longer to build equity in the home
- Limited to financing a primary residence
Best for:
- First-time homebuyers
- Buyers or homeowners looking to refinance who have experienced credit events in the past three years
What are my FHA loan options?
Summit Mortgage helps you navigate your FHA loan options, understand the requirements, and see if you qualify.
Terms for home improvement/renovation loans
A loan through the Federal Housing Administration (FHA) is often a 30-year term. Borrower credit scores can start at 580, and the debt-to-income ratio can reach a maximum of 57%, depending on other risk assessments.
Am I eligible for an FHA home loan?
Unlike some loan programs, FHA is more lenient on credit criteria for borrowers, but it does require the property to meet stricter standards and allows lower loan limits than traditional loans.
- 580 credit score or higher
- 3.5% down payment
- Debt to income maximum is 57%
- Stable employment and income
Is an FHA home loan right for my financial situation?
If you’re looking to purchase a home with a low down payment, a high debt ratio, or recent credit events, an FHA loan might be the right fit. Every situation is unique. The only way to determine what you are eligible for and what is the best fit for you is to speak with a Summit Mortgage loan officer to assess your entire situation.
Schedule a free FHA loan consultation
A local Summit Mortgage loan officer has the expertise to guide your decision-making process, answer questions, and get you approved with the best FHA loan program for your unique situation. Find a loan officer who’s right for you.
Calculate your potential loan costs and savings
Use our mortgage calculator to estimate your monthly payment by adjusting factors like purchase price, down payment, interest rate, and term. Then, connect with a loan officer to explore mortgage and refinance options that fit your budget.
How do I apply for an FHA Home Loan?
Applying for an FHA loan or determining if this type of loan is right for you is simple! Use our Quick Start Form to connect with a Summit Mortgage loan officer who can help guide you through the process.
Curious about what comes next? View our step-by-step application checklist to learn about the process and take your first step toward homeownership.
Common FHA home loan questions
Is an FHA home loan right for you?
First-time or move-up homebuyers
First-time and move-up homebuyers are eligible for FHA loans. However, the loans can only be used for primary residence purchases or refinances, and the home must meet certain criteria.
How do FHA loans stack up to other mortgage types?
An FHA loan is an excellent option for many homebuyers. However, it may be more costly for borrowers with established, average, or above-average credit and at least a 5% down payment.
Schedule a free FHA loan consultation with our mortgage experts
Summit Mortgage employs some of the most experienced loan officers in the country. Our in-depth knowledge of FHA mortgage programs, combined with our commitment to understanding your goals, will ensure your homebuying experience is as smooth and rewarding as possible. Find a loan officer near you.
Next steps to find your home loan
Congratulations, you’re on your way to finding the loan that’s right for you. If you’re ready to get matched with a Summit Loan Officer to help you with the next steps, use our Quick Start Form.
If you’d like more information first, explore our online resources to learn about the key questions to ask your lender.
