🟩 What Is an FHA Loan and How Does It Work?

Your guide to one of the most flexible, first-time buyer–friendly mortgage options available.

If you’re buying your first home — or coming back from a credit setback — an FHA loan might be your best path forward. Backed by the Federal Housing Administration, FHA loans are designed to make homeownership more accessible, especially for buyers who don’t fit into a traditional lending box.

Here’s everything you need to know: how FHA loans work, who they’re for, what they cost, and how to know if one’s right for you.

---

✅ What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration. It’s offered by approved lenders (like PRMI) and designed to help people buy a home with more flexibility — particularly in terms of credit score and down payment.

💡 It’s one of the most popular loan programs in the country — especially for first-time buyers.

---

🔍 FHA Loan Highlights

• ✔️ Down payment as low as 3.5%
• ✔️ Minimum credit score starting at 580
• ✔️ More flexible debt-to-income (DTI) ratios
• ✔️ Available for single-family homes, condos, and even 2–4 unit properties
• ✔️ Gift funds allowed for down payment
• ✔️ Streamlined refinance options available later

PRMI is a direct FHA-approved lender, meaning we handle most of your loan process in-house — no broker handoffs, no guesswork.

---

🏠 Who Are FHA Loans For?

FHA loans are ideal for:

• First-time homebuyers
• Buyers with limited savings for a down payment
• People with lower credit scores or recent credit challenges
• Buyers who want to maximize affordability

But don’t let the “first-time” label fool you — you don’t have to be a first-time buyer to use an FHA loan. You just can’t currently own another FHA-financed home.

---

💳 What Are the Credit & Income Requirements?

FHA loans are known for their flexibility, but there are still guidelines.

• Minimum credit score: 580 for 3.5% down (some lenders may allow lower with higher down)
• Down payment: 3.5% minimum (can be gifted)
• DTI (Debt-to-Income): Up to ~56% in some cases with strong compensating factors
• Employment history: Typically 2 years of verifiable income

🎯 The best way to know if you qualify? Talk to a loan officer — we’ll walk you through it with no pressure.

---

💸 What’s in an FHA Monthly Payment?

Your monthly FHA mortgage payment includes:

• Principal & Interest
• Property Taxes
• Homeowners Insurance
• FHA Mortgage Insurance Premium (MIP)

Unlike conventional loans, FHA mortgage insurance:

• Includes a one-time upfront premium (can be financed into the loan)
• Includes a monthly premium (for the life of the loan unless you refinance)

🔍 We’ll break all of this down for you in plain numbers so you know exactly what to expect.

---

📍 Are There FHA Loan Limits?

Yes — FHA loans are limited by county-based maximums.

In 2024, most counties have a standard FHA loan limit of $498,257, but in high-cost areas it can go up to $1,149,825.

🗺️ We’ll help you check your local limit based on the property you’re considering.

---

🏢 Why PRMI for Your FHA Loan?

There’s no shortage of lenders who offer FHA loans — but not all of them service them the same.

At PRMI, we:

• Are a direct FHA lender
• Handle your loan in-house from start to finish
• Offer a smooth, responsive experience with no middlemen
• Help you plan long-term — including future refinance or FHA-to-conventional transitions

We’re not here to sell you a loan — we’re here to help you own with confidence.

---

👇 Want to See if an FHA Loan is Right for You?

Let’s talk about your goals, credit, and budget — and explore your options together.