Which FHA Loan Is Right for Me?
February 26, 2021
Many borrowers go with the route of an FHA loan. This is because of the numerous ways the FHA has designed their mortgages with first-time homebuyers in mind. FHA loans have a minimum credit score stipulation of 580 with a low- down payment requirement of 3.5%, making it easier for my buyers to qualify.
Another reason many Americans go with FHA loans is that there are a number of mortgage programs that can fit different needs. Here are few of the most popular FHA loan programs:
FHA Fixed-Rate Loan
The fixed rate FHA Home Loan is a popular mortgage choice. With this type, the interest rate remains the same through the term of the loan. The consistent interest rate means that monthly payments remain the same. This is a good option for homebuyers who want to rely on fixed payments to help them set long-term budgets.
FHA ARMs
An Adjustable- rate mortgage (or ARM) has an interest rate that changes over the term of the loan. After an introductory period with a fixed, low interest rate, the rate changes annually, increasing or decreasing, depending on the market indices approved by the FHA. An adjustable- rate loan may work for borrowers who intend move out of the home within a few years. That way they can capitalize on the initial low interest rate and sell before the rates rise.
FHA One-Time Close Loan
The FHA One-Time Close Loan is a construction-to-permanent loan that finances a lot purchase, construction, and permanent loan of a new home as part of one, single mortgage. Borrowers need to qualify just once and pay a single set of closing costs whereas before, they were required to go through the closing process twice, once for the construction loan, then again for the permanent mortgage. The FHA One-Time Close Loan is a great option for those looking to build their home from scratch!
FHA EEMs
The FHA's Energy Efficient Mortgage (EEM) is a special loan program that finances various energy-efficient home improvements as part of a home loan. Along with helping borrowers pay for upgrades on their home, the FHA’s EEM program helps them save money on household utility bills by allowing them to install energy saving appliances in their home. The EEM program is a great way for FHA borrowers to upgrade their home, and can also be used as part of a refinance.
FHA Condominium Loans
In addition to buying single family homes, the FHA finances the purchase of condominiums with its Section 234(c) loan. These loans come with a 30-year term and borrowers can buy residential condos that have at least two units and are located in an FHA-approved condominium projects.
With all the options that the FHA offers, there is bound to be a program that fits your mortgage needs.
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FHA Loan Articles
August 19, 2026Homebuyers who have enough cash for a down payment still need to consider their full financial picture before choosing between a conventional mortgage and an FHA loan. Having cash on hand changes the math for both options, but savings alone won't make a conventional loan the automatic winner. Credit scores, current debt, and the type of property you want to buy all determine which loan will cost less over time.
August 11, 2026Homeowners with FHA adjustable-rate loans need to track their loans more closely. That is because FHA ARM loans start with introductory interest rates that eventually expire and are subject to change afterwards based on market rates. When interest rates rise, monthly housing payments climb on ARM loans, pushing many homeowners to consider refinancing into a fixed-rate mortgage.
August 10, 2026If you want to buy a home with an FHA mortgage, you must set up an escrow account to cover property taxes, homeowner insurance, and upfront closing expenses. While the FHA loan program has rules for funding these accounts, buyers often do not realize those rules can include approved and unallowed sources for escrow funds. What do you need to know before you set up and fund your escrow account for an FHA mortgage?
August 3, 2026Buying a home in a high-cost area requires understanding how FHA loan limits shape your financing options. Does the house for sale have a price above the local FHA loan limit? You may need to explore your jumbo loan options. There are conventional jumbo loans and FHA versions. Which is right for you? Much depends on your financial needs, plans, and goals for the loan.
July 30, 2026There is a common misconception about FHA loans that only a first-time home buyer can use the program. This is not true; repeat buyers can qualify for an FHA loan, but why does this misconception exist? Partially because state and local programs have first-time buyer requirements for down payment and/or closing cost assistance programs. So while you do not need to be a first-time buyer to get an FHA loan, you may need to meet that definition to qualify for down payment help.
