An FHA loan is a mortgage insured by the Federal Housing Administration. It is designed to help first-time homebuyers and those with lower credit scores or smaller down payments achieve homeownership. FHA loans are offered through approved lenders and backed by the government.

What credit score do I need for an FHA loan?

FHA loans accept credit scores as low as 500. With a score of 580 or higher, you can qualify for the minimum 3.5% down payment. Scores between 500-579 require a 10% down payment. FHA loans are more forgiving of past credit issues than conventional loans.

How much is the FHA down payment?

The minimum down payment for an FHA loan is 3.5% of the purchase price if your credit score is 580 or higher. For example, on a $300,000 home, you would need $10,500 down. Down payment funds can come from savings, gifts from family, or down payment assistance programs.

What is FHA mortgage insurance?

FHA loans require two types of mortgage insurance: an upfront premium (UFMIP) of 1.75% of the loan amount, and an annual premium (MIP) of 0.55% paid monthly. Unlike conventional PMI, FHA MIP typically remains for the life of the loan unless you refinance to a conventional loan.

What are FHA loan limits?

FHA loan limits vary by county. For 2024, the floor limit is $541,287 and the ceiling is $1,249,125 in high-cost areas. Washington state limits range from $541,287 to $977,500 depending on the county.

Can I use an FHA loan for a fixer-upper?

Yes! The FHA 203(k) loan allows you to finance both the purchase and renovation of a home with a single mortgage. This is great for buyers who want to purchase a home that needs repairs or updates.

FHA Loans | 3.5% Down Payment Mortgages

What is FHA?

FHA loans are backed by the Federal Housing Administration and are designed to help borrowers who need a little more help qualifying for a mortgage. With lower down payment requirements and more flexible qualification standards, FHA has been one of the most popular paths to homeownership for decades. FHA is especially popular with first-time buyers in Spokane and Eastern Washington. Pair an FHA loan with our exclusive Pathways DPA program to reduce your upfront costs even further. Contact Q Home Loans to see if FHA is right for you.

Why Choose FHA Loans?

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3.5% Down Payment

One of the lowest down payments available on any mortgage. Makes homeownership accessible when savings are limited.

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Flexible Credit Standards

FHA is designed for borrowers who need a little more help qualifying. Contact Q Home Loans to discuss your specific credit situation.

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Gift Funds Accepted

100% of your down payment can come from gift funds — family, employers, or other approved sources with proper documentation.

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Pairs with Pathways DPA

Combine FHA with our exclusive Pathways Down Payment Assistance program to cover your down payment and reduce upfront costs.

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Shorter Waiting Periods

Had a bankruptcy, foreclosure, or short sale? FHA allows shorter waiting periods than conventional loans to get you back into a home.

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Multi-Unit Properties

FHA finances up to 4-unit properties as long as you live in one unit — a smart way to start building rental income.

FHA Loans Requirements

Basic Qualifications

Credit Score: Contact Q Home Loans for details
Down Payment: 3.5% minimum (higher credit scores) or 10% (lower scores)
Debt-to-Income Ratio: Typically 43% maximum
Property Type: Primary residence only (1-4 units)
Mortgage Insurance: Required (upfront + annual premiums)

Required Documents

Pay stubs (last 30 days)
W-2 forms (last 2 years)
Tax returns (last 2 years)
Bank statements (last 2 months)
Employment verification
Photo ID and Social Security card

How It Works

FHA loans work by providing government-backed insurance that protects lenders if borrowers default. You'll pay an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount at closing, plus an annual premium (0.45%-1.05% depending on loan term and LTV) divided into monthly payments. The lower down payment and flexible credit requirements make FHA loans ideal for first-time buyers who may not have large savings or perfect credit.

Who Should Consider FHA Loans?

First-Time Homebuyers

Limited savings for down payment but steady income and employment history

Credit Rebuilders

Working to improve credit after past financial challenges

Self-Employed Borrowers

Can document income but may not qualify for conventional loans

Multi-Family Investors

Want to live in one unit and rent others (up to 4 units)