FHA Loan Calculator

What is an FHA loan?

FHA loans are mortgages insured by the Federal Housing Administration. The FHA doesn't lend money — it guarantees the loan, which lets approved lenders extend credit to borrowers who might not qualify for conventional financing (lower credit scores, smaller down payments, higher DTI).

Why FHA is the gateway loan for first-time buyers

• 3.5% minimum down payment with a 580+ credit score (10% with 500-579)
• Lower DTI requirements — typically up to 43% back-end, flexible to 50% with strong compensating factors
• Gift funds allowed for the down payment from a relative or approved source
• Assumable — a future buyer can take over your FHA loan if rates rise (a real selling point in a high-rate market)

The cost: mortgage insurance

FHA loans require two types of mortgage insurance premium (MIP):

• Upfront MIP: 1.75% of the base loan amount, financed into the loan (you don't pay it at closing — it gets added to your loan balance).
• Annual MIP: 0.50% (or 0.55% if LTV > 95%) of the loan balance, paid monthly. For 30-year loans with less than 10% down, this MIP runs for the life of the loan — you can't cancel it the way you can with conventional PMI at 78% LTV.

How to drop the lifetime MIP

The only way to remove FHA MIP after 11 years (the default for < 10% down) is to refinance into a conventional loan once you have 20% equity and a 620+ credit score. Many FHA borrowers do exactly this once their home appreciates.

FHA loan limits

FHA loan limits are set by county. The 2025 floor is around $498,257 for most counties (single-family). High-cost counties go up to $1,209,750 and beyond. Check your area at hud.gov.