← All Glossary Terms
Definition
An FHA loan is a mortgage insured by the Federal Housing Administration (part of HUD), making lenders willing to offer favorable terms to borrowers with lower credit scores and smaller down payments. FHA requires as little as 3.5% down with a 580+ credit score (or 10% down with 500–579). Because the government backstops the lender against default, FHA accepts higher debt-to-income ratios than conventional loans. The tradeoff: all FHA loans require an upfront MIP of 1.75% of the loan amount (financeable) plus an annual MIP of 0.55–0.85% — and on 30-year loans with less than 10% down, that MIP is permanent for the life of the loan.
Also Known As
FHA mortgage
government-backed loan
HUD loan
FHA-insured mortgage
Used in Context
- Maria used an FHA loan to buy her first home in Atlanta with just 3.5% down — her 610 credit score wouldn't have qualified for a conventional loan without paying a much higher PMI rate.
- The FHA loan limit in Florida's standard counties is $524,225 for 2026; Miami-Dade and Broward have higher limits reflecting their elevated home values.
- After 5 years of on-time FHA payments, David refinanced into a conventional loan to eliminate the permanent MIP, saving $180/month.
Ready to compare mortgage options?
Free quotes from licensed experts — no spam, no obligation, results in 60 seconds.
Get Free Quotes →