FHA loans have helped millions of Americans buy a home with less cash and more flexibility — but there’s still a lot of confusion about how they work.
At Promise Home Loans, we’ve walked thousands of borrowers through the FHA loan process. Here are the most common questions we hear, along with examples to show how FHA loans can work for your situation.
This is one of the most attractive features of an FHA loan: you can buy a home with as little as 3.5% down, assuming you meet the minimum credit requirements (typically a 580+ FICO score).
Let’s say you’re buying a $400,000 home.
This low down payment can make homeownership far more accessible — especially for first-time buyers or families who are cash-conscious.
Yes! You can have a co-borrower, which is great if you need help qualifying based on income or credit.
However, if you want to use the 3.5% minimum down payment, your co-borrower must be a family member or someone defined as a “family-type relationship” under FHA guidelines. This includes:
If the co-borrower is not family, you may still qualify — but the down payment requirement increases to 10%.
Maria is a first-time buyer who earns $65K/year. Her credit is good, but her income isn’t quite enough to qualify on her own for a $375,000 home. Her brother co-signs as a non-occupying co-borrower. With FHA, Maria still qualifies with just 3.5% down ($13,125), thanks to her brother’s help.
Yes, and many of our borrowers do. FHA loans are often eligible for local or state down payment assistance programs (DPAs) — including grants, forgivable second loans, or deferred-payment loans.
Javier qualifies for an FHA loan with a 3.5% down payment on a $350,000 home ($12,250). His city offers a $15,000 first-time homebuyer grant, which covers both his down payment and a portion of his closing costs — letting him buy with virtually no upfront cash out of pocket.
We’ll help you identify DPA programs you may be eligible for based on your location and income.
Actually, no — FHA rates are often lower than conventional loans, especially for borrowers with average credit.
Since FHA loans are government-backed, lenders can offer more competitive rates even if your credit isn’t perfect. However, the mortgage insurance premium (MIP) adds to your monthly cost, so we’ll help you compare total monthly payment, not just the rate.
Not at all. FHA loans are available to anyone, as long as:
That means repeat buyers, move-up buyers, or even refinancers can use FHA loans.
Yes — and there are multiple refinance options:
Yes — and depending on your goals, putting more down could be a smart move.
But if you’d rather keep your cash for other goals — like repairs, moving expenses, or savings — 3.5% down is just fine.
Kylie and Eric are buying a $450,000 home. They can afford to put down 10%, but decide to stick with 3.5% down ($15,750) and use the extra cash for remodeling and moving costs. Their lender helps them run scenarios so they can decide what’s best for them.
FHA loans are one of the most flexible and accessible loan types available — especially when:
At Promise Home Loans, we’re here to help you understand your options, not push you into one. FHA may be the right fit — or we might find something better based on your profile.
Let’s chat. We’ll walk you through FHA vs. conventional vs. other options — and help you make the smartest move for your goals.
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