Quick answer: FHA loans let you buy with as little as 3.5% down and a credit score of 580. The trade-off is mortgage insurance: a 1.75% upfront premium (usually financed into the loan) plus an annual MIP of about 0.55% added to your payment. The calculator below is set to Loan type: FHA and handles both automatically.
FHA loans, insured by the Federal Housing Administration, are the most popular path for first-time and lower-credit buyers because of the low 3.5% down payment. But the true cost includes mortgage insurance premiums (MIP) that a basic calculator ignores.
The calculator below finances the 1.75% upfront MIP into your loan and adds the annual MIP to your monthly payment, so the number you see is what you would actually pay.
This calculator is preset to Loan type: FHA with 3.5% down. It finances the 1.75% upfront MIP into the loan and adds annual MIP to your monthly payment automatically.
Mortgage payment calculator
P&I, tax, insurance, PMI & HOA — by loan type, all in one place
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How FHA loans work
FHA loans are issued by regular lenders but insured by the government, which lets lenders accept lower credit scores and smaller down payments. The headline terms for 2026:
- 3.5% down with a credit score of 580 or higher (10% down if 500–579).
- More flexible credit than conventional loans — past blemishes are treated more leniently.
- Loan limits set by county, ranging from about $524,225 in most areas to over $1.2 million in high-cost markets.
FHA mortgage insurance (MIP) explained
This is the part borrowers most often miss. FHA loans carry two mortgage-insurance charges:
| Charge | Amount (2026) | How it's paid |
|---|---|---|
| Upfront MIP | 1.75% of the loan | Usually financed into the loan balance |
| Annual MIP | ~0.55% of the loan / yr | Split into your monthly payment |
FHA MIP often lasts the life of the loan. Unlike conventional PMI, which drops off at 20% equity, FHA annual MIP stays for the full term if you put down less than 10%. With 10%+ down, it drops off after 11 years. Many borrowers refinance into a conventional loan once they reach 20% equity specifically to shed MIP.
FHA vs. conventional — which is cheaper?
It depends mostly on your credit score. FHA tends to win for lower credit (580–660) because its base rate and insurance are less credit-sensitive. Conventional usually wins for stronger credit (700+) because PMI is cheaper and removable. Our full FHA vs. conventional comparison walks through the break-even, and you can model both here by switching the Loan type.
Who should use an FHA loan?
FHA is often the best fit if your credit score is in the 580–660 range, your down payment is under 10%, or your debt-to-income ratio is a little high. If you have strong credit and can reach 20% down, run a conventional scenario too — you may avoid mortgage insurance entirely. Either way, check what you can afford with our affordability guide.
FHA closing costs and what else to budget
Beyond the down payment and MIP, plan for closing costs of roughly 2% to 5% of the loan amount — covering the appraisal, title work, lender fees, and prepaid taxes and insurance. FHA has two features that help here: sellers are allowed to contribute up to 6% of the purchase price toward your closing costs, and your down payment and closing costs can come from gift funds from family or from a down payment assistance program. That combination is part of why FHA is so accessible to first-time buyers with limited savings.
FHA property and appraisal requirements
Because the loan is government-insured, the home must meet FHA's Minimum Property Requirements — it has to be safe, structurally sound, and sanitary. The FHA appraisal checks both value and condition, so fixer-uppers with major issues (a failing roof, unsafe wiring, peeling lead paint in older homes) may not qualify without repairs first. The home must also be your primary residence; FHA loans can't be used for investment properties or vacation homes.
Refinancing out of FHA later
Because FHA mortgage insurance often lasts the life of the loan, a common long-term strategy is to refinance into a conventional loan once you reach 20% equity — eliminating MIP entirely. If rates have fallen and you're staying on FHA, the FHA Streamline Refinance offers a faster, lower-documentation path to a better rate. Compare both against your current payment before deciding.
Frequently asked questions
- HUD — FHA loans — official Federal Housing Administration loan program rules and requirements.
- HUD — FHA mortgage limits — official tool for FHA loan limits by county.
- CFPB — What is an FHA loan? — federal explainer on FHA loans and mortgage insurance.
- CFPB — FHA loan options — comparison guidance for FHA versus other loan types.
Last reviewed: June 1, 2026. See our data sources and editorial methodology for how we research every article.