Loan options / FHA loans
A lower barto get inthe door.
FHA loans are insured by the Federal Housing Administration so lenders can say yes to buyers with smaller savings or a thinner credit history. Down payments start at 3.5%, and the qualifying rules are more forgiving than conventional. It is the loan most first-time buyers end up in, and one of the ones we close most.
Who it's for
Built for buyers who are almost there.
FHA is a purchase tool, not a consolation prize. Plenty of buyers with strong credit choose it because the down payment is smaller and the debt-to-income rules are wider.
Smaller savings
3.5% down on a $400,000 home is $14,000, and the money can come from a gift, a down-payment assistance program, or your own savings.
Recent bumps in the road
A past collection, a medical debt, or a bankruptcy that is a few years behind you does not disqualify you. We look at the pattern since.
Student loans, car payments
FHA allows debt-to-income ratios that conventional loans usually will not, especially with compensating factors like reserves or a strong payment history.
Live in one, rent the rest
Buy a duplex, triplex, or fourplex with 3.5% down as long as you live in one of the units. Rental income from the other units can help you qualify.
What you'll need
What FHA looks for.
- Credit score580 or higher for the 3.5% down payment. Between 500 and 579 you can still qualify with 10% down. Patriot works with scores down to FHA's floor of 500 (subject to change).
- Down payment3.5% of the purchase price. Gift funds from family, employer programs, and approved down-payment assistance are all allowed.
- Income and employmentTwo years of steady income, documented. Self-employed borrowers use two years of tax returns; W-2 borrowers use pay stubs and W-2s.
- Debt-to-incomeGuidelines commonly allow up to 43%, and higher with compensating factors through automated underwriting.
- OccupancyFHA is for the home you live in. You must move in within 60 days and stay at least a year.
- The propertyAn FHA appraiser confirms value and checks the home against HUD minimum property standards for safety, security, and soundness.
How it works
From first call to closing. Five cards, one person the whole way.
Talk to your loan officer
One call, one person. You get a name, an NMLS number, and a direct line, and that person stays on your file until you close.
Get pre-approved
We verify income, pull credit, and lock down what you can afford. Most pre-approvals are ready within a business day.
Shop with confidence
Your pre-approval letter tells sellers you are a real buyer. Your loan officer is available to your agent for questions on any offer.
Appraisal and underwriting
The appraisal is ordered the day you go under contract. Every condition and milestone comes to you by text and email.
Close and move in
Sign, fund, and get your keys. No prepayment penalty if you refinance or sell later.
Ways to use it
Purchase, refinance, or renovate.
Purchase
Single-family homes, FHA-approved condos, manufactured homes on permanent foundations, and 2–4 unit properties you live in.
FHA Streamline refinance
Lower the rate on an existing FHA loan with no appraisal and minimal documentation. Fast, and the upfront MIP is reduced.
Cash-out refinance
Tap equity at up to 80% of your home's value with an FHA cash-out, even if your current loan is not FHA.
203(k) renovation
Finance the purchase and the repairs in one loan, based on the value of the home after the work is done.
Questions
Straight answers.
How much are the mortgage insurance premiums, really?
Two parts. An upfront premium of 1.75% of the loan amount, which is almost always financed into the loan, and an annual premium, currently 0.55% for most 30-year loans, paid monthly. On a $350,000 loan that is roughly $160 a month.
Can I get rid of the mortgage insurance?
With less than 10% down, the annual premium lasts the life of the loan. The practical exit is refinancing into a conventional loan once you have 20% equity, which your loan officer will flag for you when the numbers work.
What are the FHA loan limits?
They vary by county and are updated every January. The floor covers most of the country and higher-cost areas get higher limits. Your loan officer will confirm the limit for the county you are buying in.
Can the down payment be a gift?
Yes, the entire 3.5% can be a gift from a relative, employer, or close friend with a documented relationship. A short gift letter and a paper trail for the funds is all that is needed.
Is FHA only for first-time buyers?
No. Anyone who will live in the home can use FHA, including repeat buyers and people who currently own another home in some circumstances.
How does FHA compare to a 3% conventional loan?
Conventional mortgage insurance can be cheaper with good credit and drops off automatically at 78% loan-to-value. FHA is easier to qualify for and its insurance costs less with lower scores. We run both side by side and show you the difference.
Talk to an FHA loan officer in your state.
Licensed by name, in the state you are buying in. No call center, no hand-offs.
FHA loan requirements, premiums, and county loan limits are set by the U.S. Department of Housing and Urban Development and are subject to change. Patriot Home Mortgage is an FHA-approved lender and is not a government agency. Belem Servicing LLC d/b/a Patriot Home Mortgage, NMLS #715386. Equal Housing Lender.