Program highlights
- Minimum score of 580
- Manual underwrites down to 580
- FHA 203(k) standard and limited renovation
- FHA 203(h)
- FHA $100 down
- Good Neighbor Next Door
- FHA 5/1 ARM
- Down payment assistance, 100%
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration, which lets lenders offer more flexible credit and down payment guidelines than most conventional loans. FHA loans are for primary residences, and they are one of the most common paths for first-time buyers.
How it works
FHA loans typically require a 3.5% down payment, and the money can come from savings, a gift from family, or an approved down payment assistance program. Our minimum credit score is 580, and we can manually underwrite files down to 580 when an automated system will not approve them. A manual underwrite means a real underwriter reviews your full story, including rent history, reserves, and the reasons behind past credit issues.
FHA uses two kinds of mortgage insurance: an upfront premium that is usually rolled into the loan, and an annual premium paid monthly. In many cases the annual premium lasts for the life of the loan unless you refinance later, so we always compare the long-term cost against a conventional loan.
FHA also has several specialty versions:
- FHA 203(k): buy a home and finance repairs or upgrades in the same loan. The limited version covers lighter, non-structural work. The standard version handles larger projects.
- FHA 203(h): helps people whose homes were destroyed or damaged in a federally declared disaster buy or rebuild.
- FHA $100 down: a very low down payment option, typically tied to HUD-owned homes. Availability depends on the property.
- Good Neighbor Next Door: a HUD program for law enforcement officers, pre-K through 12th grade teachers, firefighters, and EMTs buying eligible HUD homes in revitalization areas. Program rules and occupancy requirements apply.
- FHA 5/1 ARM: a fixed period of five years, then an annual adjustment, for buyers who expect to move or refinance.
Who it fits
FHA fits buyers who have steady income but a credit score below what conventional pricing rewards, or who have a higher debt-to-income ratio. It also fits buyers who have been through a past credit event and have since rebuilt. If your score is strong and you have some savings, a conventional loan may cost less, and we will tell you that.
What you need to apply
- Recent pay stubs and two years of W-2s or tax returns
- Two months of bank statements, or a gift letter if family is helping
- A valid ID and Social Security number
- Explanations for any recent credit issues, if applicable
- For 203(k), contractor bids and a scope of work
How we help in Austin
Plenty of homes across Central Texas, from Round Rock to San Marcos, fall within FHA loan limits, which are set by county. We check the limit for your county, compare FHA against conventional and down payment assistance options, and help you and your Realtor structure an offer that works. Apply in about 10 minutes and we typically issue a pre-approval letter within 24 hours. We also lend in 6 other states.
Additional terms and conditions apply. Not all loan types are compatible with this product. Subject to underwriting conditions. Not a promise to make a loan. All borrowers must qualify.
FHA Loans: common questions
What is the minimum credit score for an FHA loan with your team?
Our FHA minimum is a 580 credit score. We can also manually underwrite FHA files down to 580 when the automated system does not approve the loan. A manual underwrite looks closely at your rent history, reserves, and what caused any past credit problems, so a real person reviews your full picture instead of a single score.
How much is the down payment on an FHA loan?
FHA loans typically require 3.5% down with a qualifying score. The down payment can come from your savings, a gift from a family member, or an approved down payment assistance program. We also offer FHA $100 down, which is typically tied to HUD-owned homes, so availability depends on the specific property you are buying.
Does an FHA loan have mortgage insurance?
Yes. FHA loans typically have an upfront mortgage insurance premium, usually rolled into the loan amount, plus an annual premium paid monthly. In many cases the annual premium stays for the life of the loan unless you refinance. That is why we compare FHA and conventional side by side before you choose, so you understand the long-term cost.
Can I buy a fixer-upper with an FHA loan?
Yes, with an FHA 203(k) loan. It combines the purchase price and the cost of repairs or upgrades into one mortgage. The limited 203(k) covers lighter work like flooring, paint, or appliances. The standard 203(k) handles larger projects, including structural repairs. You will need contractor bids and a scope of work, and we help coordinate the process.
What is Good Neighbor Next Door?
Good Neighbor Next Door is a HUD program for law enforcement officers, pre-K through 12th grade teachers, firefighters, and emergency medical technicians. Eligible buyers can purchase certain HUD-owned homes in designated revitalization areas at a discount off list price, with occupancy requirements. It pairs with FHA financing, often with a very low down payment. Program rules and home availability vary.