FHA loans
An FHA loan is a mortgage made by a lender and insured by the Federal Housing Administration (FHA). It is often used by buyers who want a smaller down payment.*
What it is
FHA insures the loan, which protects the lender if the borrower does not repay. HUD says the down payment on an FHA loan can be as low as 3.5%. Credit score, down payment and the property all affect whether a borrower qualifies and on what terms.
What it costs
- FHA loans have mortgage insurance premiums: an upfront premium and an annual premium. The annual premium depends on the loan amount, the loan term and the down payment.
- For loans of more than 15 years with a base loan of $726,200 or less, HUD's published annual premium is 0.50% to 0.55%, depending on the down payment. It lasts 11 years or the life of the loan, depending on the down payment. Larger loans and shorter terms have different rates. HUD can change these, so confirm the current table with your lender.
- Closing costs, interest rate and points are set by your lender and are shown on your Loan Estimate.
FHA loan limits
For 2026, HUD set the FHA one-unit limit at $541,287 in lower-cost areas and $1,249,125 in the highest-cost areas. Limits depend on the county. Ask your lender for the limit where you are buying.
Other things to know
- The home generally must be your primary residence.
- The home must meet FHA property standards, and an FHA appraisal is required.
- FHA is a loan program, not a lender. Different lenders can offer different rates and terms on the same program.
Questions to ask a lender
- What is my total mortgage insurance cost, upfront and each month?
- What are the rate, points and closing costs on my Loan Estimate?
- What is the FHA limit in the county where I am buying?
- How much can the seller pay toward my costs?
Sources
- HUD: FHA loans
- HUD Mortgagee Letter 2025-23 (2026 loan limits)
- HUD Mortgagee Letter 2023-05 (annual premiums)
* General information only, not a loan offer, a commitment to lend or advice. Program rules, limits and fees are set by the agencies above and can change. Eligibility, rates and approval depend on credit, income, the property and the lender, and are not assured. This site is not affiliated with or endorsed by HUD or the FHA. Program availability depends on the lender. Sinjo Thomas, NMLS #2680792, C2 Financial Corporation, NMLS #135622. See disclosures.
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