🏠 What Is an FHA Loan and How Does It Work?
💵 How Much Down Payment Do You Need for an FHA Loan?
Flexible, forgiving, and built to help you move forward.
One of the biggest reasons homebuyers and homeowners choose FHA loans?
👉 The requirements are more flexible than most other mortgage programs — especially when it comes to credit scores, income, and past financial history.
Whether you’re buying your first home or refinancing to consolidate debt, here’s exactly what you’ll need to qualify for an FHA loan in 2025.
✅ 1. Minimum Credit Score
FHA loans are known for lower credit score requirements than conventional loans.
- 580+ credit score = only 3.5% down payment required
- 500–579 credit score = requires 10% down
- Below 500? May still qualify after rebuilding — ask us
📘 Most lenders prefer 580+ for a smoother approval, but FHA is one of the few options available below 620.
✅ 2. Down Payment
- Minimum down payment: 3.5% (if credit score is 580 or higher)
- Can be 100% gifted by a relative or approved source
- Can be combined with down payment assistance (DPA) programs
💡 FHA makes it possible to buy a home without saving tens of thousands of dollars.
✅ 3. Income & Employment
FHA loans require:
- Consistent income (W-2, self-employed, or retirement okay)
- 2-year job history (doesn’t need to be with the same employer)
- Proof of income: pay stubs, W-2s, tax returns, or bank statements
✅ Self-employed borrowers?
We help structure FHA files with P&Ls, business returns, and layered income.
✅ 4. Debt-to-Income (DTI) Ratio
DTI measures how much of your income goes to debts.
- FHA typically allows up to 43%–50% DTI
- Includes mortgage, credit cards, auto loans, student loans, etc.
- May be higher with strong credit or compensating factors
💬 We’ll run your DTI upfront and help identify ways to improve it — especially if you’re refinancing to consolidate debt.
✅ 5. Property Requirements
- Must be your primary residence
- 1–4 unit homes, condos, townhomes, and approved manufactured homes
- Property must meet FHA appraisal and safety standards
Buying a duplex, triplex, or 4-plex?
You can use FHA to finance it — as long as you live in one unit.
✅ 6. Mortgage Insurance
FHA loans require:
- Upfront Mortgage Insurance Premium (UFMIP) — 1.75% of loan
- Monthly mortgage insurance (MIP) — lasts for 11 years or the life of the loan (depending on your down payment)
📌 We’ll break down the numbers and show you how MIP affects your monthly payment — and when it might be worth refinancing later.
🧠 Bonus: FHA Is Great for…
✅ First-time homebuyers
✅ Self-employed or gig workers
✅ Credit scores below 640
✅ Buyers using gift funds or DPA
✅ Homeowners doing a cash-out refinance to reduce debt or free up funds
✅ People recovering from bankruptcy or past hardship
🏢 Why PRMI?
At PRMI, we:
- Help you qualify even if your file isn’t perfect
- Offer FHA purchases, cash-out, and streamline refis
- Provide credit guidance and document support
- Underwrite in-house for speed and clarity
You don’t need perfect credit or a huge down payment — just a lender that knows how to guide you through it.
👇 Want to See If You Meet FHA Loan Requirements?
Let’s walk through your credit, income, and goals — and show you exactly how FHA financing could work for you.