The most popular FHA home loan is the fixed-rate loan known as the 203(b). It often works well for first time home buyers. It allows individuals to finance up to 97% of their home loan and helps to keep down payments and closing costs.

FHA Loan Rates

September 18, 2014
30 Year Fixed
3.95% Rate
3.96% APR
15 Year Fixed
2.875% Rate
3.0% APR

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Fixed Rate FHA Loans

The Popular 203(b) Federally Guaranteed Mortgage

FHA Loan Types:

Home ownership rates in America continue to increase at a steady rate due in a large part to the implementation of FHA home loans more than seventy years ago. Over the years, FHA has helped Americans gain the financial independence that comes with owning a home. By creating jobs and reasonable mortgage rates for the middle class, financing military housing, and producing housing for the low income and the elderly, FHA has helped Americans become some of the best housed people in the world with over 73 million Americans currently owning their own homes.

HOW IT WORKS

By serving as an umbrella under which lenders have the confidence to extend loans to those who may not meet conventional loan requirements, FHA's mortgage insurance allows individuals to qualify who may have been previously denied for a home loan by conventional underwriting guidelines.

FHA loans benefit those who would like to purchase a home but haven't been able to put money away for the purchase, like recent college graduates, newlyweds, or people who are still trying to complete their education. It also allows individuals to qualify for a FHA loan whose credit has been marred by bankruptcy or foreclosure.

NUTS AND BOLTS

The most popular FHA home loan is the 203(b). This fixed-rate loan often works well for first time home buyers because it allows individuals to finance up to 97 percent of their home loan which helps to keep down payments and closing costs at a minimum. The 203(b) home loan is also the only loan in which 100 percent of the closing costs can be a gift from a relative, non-profit, or government agency.

Insurance on FHA mortgages are often rolled into the total monthly payment at 0.5 percent of the total loan amount which is roughly half of the price of mortgage insurance on a conventional loan. After five years or when the loan balance reaches 78 percent, the additional mortgage insurance is typically met and therefore drops off the total monthly payment.

GUIDELINES

It is not necessary to meet a minimum income requirement in order to qualify for a FHA loan but debt ratios specific to the state in which the home will be purchased have been put into place to prevent borrowers from getting into a home they cannot afford. This is done through a close analysis of income and monthly expenses.

FHA Loan Articles

Read About Mortgage News, FHA Updates, and Guidelines
FHA Rules for Adding Repairs to the Home Sale Price

If you have ever wanted to buy a home, but in the end decided to pass on the deal because of repair costs, you might be affected by the FHA loan rules for such situations under the right circumstances.

Is There a No Money Down FHA Loan Option?

FHA home loans do not feature a no money down option. One type of government-backed home loan program does, but VA loans are for qualified veterans and currently serving military members.

Applying for an FHA Loan After Previous Delinquencies

After the housing market crisis of the previous decade, many mortgage borrowers found themselves having trouble making their monthly payments. In some cases, borrowers just walked away from the mortgage completely and allowed the home to be foreclosed upo

Can FHA Loan Closing Costs Be Financed?

Some of your FHA loan closing costs may be financed, and some may--after being negotiated between buyer and seller--be paid by the seller within the boundaries of the FHA loan program’s rules. The borrower can also pay some closing costs out of pocket.

FHA Loans and Non-Occupying Co-borrowers

There are many questions about the official FHA loan rules for occupancy for single-family home loans. According to FHA rules, a borrower must occupy the home purchased with a single-family FHA loan as a personal residence as a condition of loan approval.