Loan Programs

The program that opens the door sooner.

Government-insured, with a lower credit bar and a smaller down payment than a conventional loan asks for.

What Is an FHA Loan?

Government-insured, so a lender can say yes sooner.

An FHA loan is a mortgage insured by the Federal Housing Administration. The insurance is what lets a lender say yes to a buyer whose credit or savings have not yet caught up with their income.

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Why Buyers Choose FHA Financing

Four reasons it puts people in a house years before saving for a conventional down payment would.

Qualify with a credit score from 580. FHA publishes a floor rather than leaving it to each lender to invent one, and 580 with 3.5% down is where the door opens.
Put 3.5% down, not twenty. A smaller down payment means a shorter wait, and the years spent renting while saving are years not spent building equity of your own.
A gifted down payment is allowed. FHA lets the entire down payment arrive as a documented gift from family, which is how a great many first houses actually get bought.
Repeat buyers can use it too. The first-time-buyer reputation is a myth — FHA is open to anyone who meets the credit and occupancy rules, including buyers on their third house.

More Than a Loan Program

The program that opens the door is rarely the program you keep forever.

FHA is often a door, not a destination. Mortgage insurance runs for the life of most FHA loans, which makes this a program worth refinancing out of once credit and equity have improved — a conversation to have going in, not three years afterwards.

Alliance helps you plan the whole arc. With more than 20 years of mortgage experience, Alliance pairs market knowledge with a dedicated loan officer who maps the years after closing, not just the day of it.

Is an FHA Loan a Good Fit?

Four things FHA does that a conventional loan, on paper, will not.

A lower credit bar than conventional. FHA's published floor is 580 with 3.5% down, where a conventional loan generally wants 620 before a lender will look at the file.
A repair budget inside the mortgage. An FHA 203(k) loan finances the purchase and the renovation in one loan, so a house that needs work is still a house you can buy.
The loan can move with the house. FHA loans are assumable, so a future buyer may be able to take yours over — something conventional and jumbo loans do not offer.
Room for a heavier debt load. FHA underwriting stretches further on debt-to-income than most conventional files do, which is what makes it work for a household still carrying student loans.

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Compare the Paths With Alliance

One conversation, and the real cost of every program you qualify for, side by side.

The best loan is the one your numbers pick. Your Alliance loan officer reads FHA against conventional, VA, USDA and every other program you qualify for on cash at closing, monthly payment, mortgage insurance and long-term cost.

You see the tradeoffs before you choose. Instead of being told what you qualify for, you are shown why one option beats another for your credit and your timeline — and what changes if you wait six months.

Getting FHA-ready

Five things decide whether FHA is open to you, and on what terms. Worth knowing before the first conversation.

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Credit score. 580 with 3.5% down is FHA's published floor, and 500 to 579 can still work with 10% down. Lenders may set a bar above the government's, so the floor is a starting point rather than a promise.
Down payment. 3.5% of the purchase price at a 580 score or better, and it can come entirely from a documented family gift. Below 580 the requirement rises to 10%, which is usually where rebuilding credit first costs less than buying now.
Mortgage insurance. FHA charges a premium up front and again every month, and on most FHA loans the monthly premium does not come off as equity builds. That is the trade for the lower bar, and it is the figure to weigh against conventional.
The property itself. The home has to pass an FHA appraisal, which is stricter than a conventional one about condition and safety — peeling paint, a failing roof or a missing handrail can hold a file up. It also has to be where you live.
The county loan limit. FHA sets limits county by county and they sit below the conforming limits a conventional loan works to. Above the FHA ceiling the path is conventional or jumbo, which a loan officer can check for the county you are buying in.

FHA Loan FAQs

The questions buyers ask most before deciding whether FHA is their way in.

Do I have to be a first-time buyer to use an FHA loan?

No — that is the most common misconception about the program. FHA is open to repeat buyers as well; it is simply most useful to anyone with a smaller down payment or a credit profile still being rebuilt.

How low can my credit score actually be?

580 with 3.5% down is the published FHA floor, and 500 to 579 can still work with 10% down. Individual lenders often set their own bar above the government's, so the honest answer for your file comes from a loan officer rather than from a chart.

Does FHA mortgage insurance ever go away?

On most FHA loans it does not — it runs for the life of the loan, unlike the private mortgage insurance on a conventional loan, which comes off once equity clears 20%. The usual way out is refinancing once credit and equity have both improved.

Can I use an FHA loan for a rental property?

No — FHA is built around a home you actually live in. If the plan is an investment property, conventional financing is the program that covers it, and a loan officer can show you what the difference costs.

What is an FHA 203(k) loan?

It is an FHA loan that finances a purchase and the renovation it needs in one mortgage, so a house that would fail a standard appraisal can still be bought and fixed. A loan officer will tell you whether the work you have in mind qualifies.