The minimum down payment for a FHA loan is 3.5%.

The minimum credit score for a FHA loan is 550.

FHA mortgage insurance comprises an upfront premium, typically 1.75% of the loan amount, payable at loan approval, with the option to roll it into the loan. Additionally, there’s an annual mortgage insurance premium (MIP), usually around 0.55% of the loan amount, paid monthly alongside mortgage payments. While the upfront premium is a one-time expense, the annual MIP is recurrent for the duration of the FHA loan, though borrowers putting down 10% or more may only pay it for the first 11 years of the mortgage.

To see if an FHA loan is right for you, evaluate your financial situation and homeownership goals against the unique features and requirements of an FHA loan. You should assess your credit history and score, the required down payment, the debt-to-income ratio, the mortgage insurance, your financial stability and employment history, and the interest rates and loan terms. Also, consider the property type and condition and, of course, your future plans, as FHA loans are ideal for borrowers who plan to live in their home for a considerable period, especially since the MIP can be a long-term cost.

While pre-qualification for an FHA loan is not a guarantee of loan approval, it still helps set your expectations. The pre-qualification process involves providing basic financial information to a lender. You will typically share details about your income, employment history, credit score, existing debts, and the amount you can afford for a down payment.  The lender uses this information to give you an estimate of the loan amount you might qualify for. This process doesn’t require a detailed examination of your financial records, so it’s usually quick and can often be done over the phone or online.