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The Federal Housing Administration (FHA) has a mortgage program that can help you qualify for a home loan even if your credit history isn't flawless or you don't have a large down payment. Read on to learn more about the best FHA lenders, how FHA mortgages work, and a step-by-step guide to securing an FHA mortgage.
Lender | Best For | Next Steps |
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2024 Award Winner
Rocket Mortgage®
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5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
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We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For Online application process |
Check Rates for Rocket Mortgage®
On Rocket Mortgage/Quicken Loans' Secure Website. |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For Diverse loan terms and products |
|
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For Diverse loan terms and products |
|
2024 Award Winner
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For Diverse loan terms and products |
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For Diverse loan terms and products |
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For Low rate guarantee |
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For Diverse options and homebuyers building credit |
To find the best lender for an FHA loan, start by getting prequalified or pre-approved for a mortgage with a few lenders to get custom estimates. Prequalification will give you a ballpark rate based on your finances, and won't affect your credit score; applying for pre-approval will lower your credit score slightly, but you'll get more precise rate quote.
Here are a few points to keep an eye out for when comparing lenders:
On Rocket Mortgage/Quicken Loans' Secure Website.
Best for: Online application process
Bottom Line
Rocket Mortgage led the transition to a full digital experience and online-only applications. Its seamless process is one reason Rocket Mortgage is consistently ranked in the top two on J.D. Power's customer service rankings. Rocket Mortgage has a robust and high-quality app that makes it easy to use.
Min. Credit Score 580 FHA 620 other mortgage products
Min. Down Payment 0%-3.5% (FHA & VA loans) 3% (conventional loans)
Key Features
Loan Types
Fixed Rate Terms
Adjustable Rate Terms
Best for: Diverse loan terms and products
Citi Mortgage
Bottom Line
The diverse set of loan products and terms and relationship discounts make it a top pick, particularly for first-time home buyers and people interested in FHA loans. The high customer satisfaction ratings are the cherry on top.
Min. Credit Score 580 FHA 620 other mortgage products
Min. Down Payment
Key Features
Loan Types
Fixed Rate Terms
Adjustable Rate Terms
Best for: Diverse loan terms and products
Bank of America Mortgage
Bottom Line
Bank of America is one of the largest banks in the U.S., offering a wide variety of financial products in addition to its mortgages. Few lenders can match the lineup of loan products and terms. Bank of America offers a Preferred Rewards program for borrowers who have bank accounts at the bank and investment accounts at Merrill. Borrowers can qualify for an origination fee or interest rate reduction based on their eligible tier at the time of application.
Min. Credit Score
Min. Down Payment 0% VA loans 3.5% FHA 3% Conventional loans, Affordable Loan Solution® mortgage, Freddie Mac Home Possible® mortgage 5% Other loans
Key Features
Loan Types
Fixed Rate Terms
Adjustable Rate Terms
Best for: Diverse loan terms and products
PNC Mortgage
Bottom Line
PNC is a large bank with a wide range of financial products. It offers an online tool called Home Insight Planner to help borrowers find a home that fits their budget and needs. It then matches a borrower to its diverse loan products and terms. PNC can accommodate many borrowers, including those looking for mortgage options with no PMI.
Min. Credit Score
Min. Down Payment 0% VA and USDA 3% conventional 3.5% FHA
Key Features
Loan Types
Fixed Rate Terms
Adjustable Rate Terms
Best for: Diverse loan terms and products
Chase Mortgage
Bottom Line
The wide array of loan types and low- to no-down-payment options makes it a compelling lender to consider for a purchase or refi.
Min. Credit Score 620
Min. Down Payment 0% VA and FHA loans 3% Dreamaker loans 3.5% FHA 5% Conforming
Key Features
Loan Types
Fixed Rate Terms
Adjustable Rate Terms
Best for: Low rate guarantee
Pennymac
Bottom Line
Pennymac specializes in government mortgages like VA and FHA loans. Pennymac offers rate transparency, help via phone or online, flexible loan terms, and a rate guaranteed to beat competitors. Pennymac is a great place for people to start looking for a mortgage.
Min. Credit Score 580 FHA and VA loans 620 Conventional loan 700 Jumbo loan
Min. Down Payment
Key Features
Loan Types
Fixed Rate Terms
Adjustable Rate Terms
Best for: Diverse options and homebuyers building credit
New American Funding
Bottom Line
New American Funding is one of the largest privately owned direct mortgage lenders in the country. The lender offers competitive rates and a wide variety of loans and customizable loan terms. The lender also has a highly efficient lending process that allows for quicker closing times. What's more, New American can be a good solution for people building credit and wanting a good mortgage. It focuses on lending to underserved communities.
Min. Credit Score 580 FHA 620 other mortgage products
Min. Down Payment 0% VA 3% Conventional 3.5% FHA
Key Features
Loan Types
Fixed Rate Terms
Adjustable Rate Terms
If you're looking to get a mortgage with poor credit or without a large down payment, an FHA loan could be a smart option. Use our list above as a starting point to find the best FHA lenders for bad credit.
But if your credit score is higher or you have a relatively large down payment, you'll probably save money with a conventional mortgage.
For example:
If that's your situation, get started with our list of this month's best mortgage lenders.
For lenders to offer FHA loans, they must be approved by the Federal Housing Administration, which backs those loans. Many banks and lending institutions offer FHA loans, but there are some lenders that are not approved to offer them.
An FHA mortgage is a private home loan insured by the government. Because the loan amount is backed by the FHA, lenders are more willing to take on high-risk borrowers.That said, FHA does have some requirements, such as:
Yes, FHA loans come with costs above what you'll pay on the mortgage. Perhaps the most significant is the FHA mortgage insurance premium (MIP), which is broken down into two types: upfront and annual.
The upfront MIP is 1.75% of the loan amount. For example, if you buy a $300,000 home and put 3.5% down, your base loan amount is $289,500. The upfront MIP on this loan amount would be 1.75% of $289,500, or $5,066.25. This amount is paid only once and can be rolled into your FHA loan.
The annual MIP is a bit more complicated to calculate. It depends on the loan length, amount, and down payment.
If your down payment is less than 10%, you'll pay annual MIPs for the entire length of your FHA loan.
For those FHA borrowers who can put down 10% or more, annual MIPs can be dropped after 11 years for both 15- and 30-year loan terms.
No, you don't need a minimum or maximum income to qualify for an FHA loan. But there are FHA loan limits -- that is, a maximum amount you can borrow. FHA loans can be made in higher amounts for a duplex, because there are more units involved.
If you're curious about the FHA loan limit for a specific geographic location, the Department of Housing and Urban Development (HUD) has a quick and easy search tool you can use.
FHA loans have their benefits and drawbacks so it's important to consider both.
Here's a closer look at a few pros and cons.
An FHA loan is a type of mortgage insured by the Federal Housing Administration. These mortgage loans have lower barriers to entry and can help you finance a home even if you don't have a high credit score or large down payment.
Because the requirements aren't as strict as conventional mortgages, these loans are perfect for first-time home buyers or those with poor credit.
FHA mortgages come in two different types:
One of the most important points to know about FHA loans is that they are meant only for owner-occupied properties. You can't use an FHA loan to buy a vacation home, rental, or investment property.
Learn more: FHA vs. Conventional Loan
An FHA loan is a type of mortgage loan that is designed for buyers who have poor credit scores, small down payments, or higher-than-average DTI ratios. FHA loans are made by private mortgage lenders, such as banks, credit unions, and specialized mortgage lenders, and are guaranteed by the Federal Housing Administration.
FHAs require two types of mortgage insurance premiums (MIP): annual and upfront. They don't, however, require private mortgage insurance (PMI).
Yes, the minimum FICO® Score required for an FHA loan is 580. For down payments above 10%, the minimum credit score is 500.
The best bank for FHA loans is one that offers you a competitive mortgage rate and will pre-approve you even if your credit score isn't flawless. Many national banks have FHA mortgage programs, but you can check out credit unions to compare rates.
No, they're not the same. An FHA lender is someone who will issue you an FHA loan, whereas an FHA mortgage broker is an intermediary who will connect you with FHA lenders or FHA mortgage companies. Brokers can help you find good FHA loan rates, but they won't lend you money themselves.
Our Mortgages Experts
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.