FHA Loan Calculator

FHA Loan Calculator

Calculate your FHA loan details, payments, and eligibility

Loan Calculator

(3.50% of purchase price)
Exclude housing costs; include car loans, credit cards, student loans, etc.

Loan Results

Enter loan details and click Calculate to see results.

Search Our Site

Find Our Advanced Calculators

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Calculation History

No calculation history yet.

FHA Loan Information

What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a government agency within the U.S. Department of Housing and Urban Development (HUD). FHA loans are designed to help low-to-moderate income borrowers who may have lower credit scores or smaller down payments qualify for a mortgage.

The FHA doesn't lend money directly; instead, it insures loans made by FHA-approved lenders, reducing their risk and allowing them to offer more favorable terms to borrowers.

Key FHA Loan Requirements

Requirement FHA Guidelines
Minimum Down Payment 3.5% with credit score ≥580
10% with credit score 500-579
Credit Score Minimum 500 (very limited approval)
580+ for best terms
Debt-to-Income Ratio (DTI) 31% front-end ratio (housing costs)
43% back-end ratio (all debts)
Higher ratios possible with compensating factors
Loan Limits Vary by county, range from $420,680 to $1,089,300 (2023)
Property Requirements Must be primary residence
Must pass FHA appraisal/inspection
Mortgage Insurance Upfront MIP: 1.75% of loan amount
Annual MIP: 0.55% to 0.60% (varies by loan)
Employment Stable 2-year history preferred
Explanation needed for employment gaps

Advantages of FHA Loans

  • Lower down payment requirements compared to conventional loans (as low as 3.5%)
  • More lenient credit requirements, making homeownership accessible to those with less-than-perfect credit
  • Competitive interest rates, often lower than conventional loans for borrowers with lower credit scores
  • Seller concessions up to 6% of the purchase price to help with closing costs
  • Assumable mortgage feature, allowing future buyers to take over your loan terms
  • Non-occupant co-borrowers allowed, helpful for first-time buyers

Disadvantages of FHA Loans

  • Mandatory mortgage insurance regardless of down payment size
  • Upfront MIP cost (1.75% of loan amount)
  • Longer mortgage insurance duration compared to conventional loans (potentially for the life of the loan)
  • Stricter property requirements that might limit your home choices
  • Loan limits that might be too low in high-cost areas

Understanding Mortgage Insurance Premium (MIP)

FHA loans require two types of mortgage insurance:

Upfront Mortgage Insurance Premium (UFMIP)

  • 1.75% of the loan amount
  • Can be paid at closing or financed into the loan
  • Non-refundable except for refinancing to another FHA loan within 3 years

Annual Mortgage Insurance Premium (Annual MIP)

  • 0.45% to 0.60% of the loan amount annually (depends on loan amount, term, and LTV ratio)
  • Divided by 12 and added to monthly payments
  • Duration depends on loan term and down payment:
    • 30-year loan with less than 10% down: life of loan
    • 30-year loan with 10% or more down: 11 years
    • 15-year loan with 10% or more down: no annual MIP required
Important: The only way to remove FHA mortgage insurance on most loans is to refinance to a conventional loan once you have at least 20% equity in your home.

Tips for FHA Loan Applicants

  1. Check your credit score before applying and address any issues
  2. Save for both down payment and closing costs (typically 3-6% of purchase price)
  3. Get pre-approved before house hunting to understand your budget
  4. Research down payment assistance programs available in your area
  5. Consider the long-term cost of mortgage insurance in your budget planning
  6. Compare FHA loans with other options like conventional, VA, or USDA loans
  7. Work with an experienced FHA lender who understands the program's requirements
Our Website