FHA Loans
Federal Housing Administration
The #1 first-time buyer program in America. Buy a home with as little as 3.5% down — and yes, it works on government foreclosures.
What Is an FHA Loan?
An FHA loan is a mortgage insured by the Federal Housing Administration. The government doesn't lend you the money — a regular bank does. But because FHA insures the loan, banks take on less risk, which means they can approve buyers with lower credit scores and smaller down payments.
FHA loans work on almost any property type: single-family homes, condos, duplexes, triplexes, and fourplexes. They work on HUD homes, Fannie Mae HomePath properties, bank foreclosures, and standard sales. If it's a livable home, FHA can probably finance it.
Who Qualifies?
Step-by-Step: How to Get an FHA Loan
Check Your Credit Score
Get your free report from annualcreditreport.com. You need 580+ for 3.5% down. If you're below, work on paying down cards and clearing errors — it's worth the wait.
Get Pre-Approved
Contact 2-3 FHA-approved lenders. They'll review your income, credit, and debts to tell you how much you can borrow. Pre-approval gives you a price range and shows sellers you're serious.
Find Your Property on PodLuxe
Search for HUD homes, foreclosures, and government properties in your target area. Filter by your price range. HUD homes give owner-occupant buyers 15 days of exclusive bidding before investors can bid.
Work with an FHA-Registered Agent
For HUD homes, your agent must be registered on hudhomestore.gov. For other properties, any licensed agent works. They submit offers and guide the paperwork.
Submit Your Offer or Bid
For HUD homes, bids are submitted electronically through your agent during the bidding window. For other foreclosures, your agent submits a purchase offer. Include your pre-approval letter.
FHA Appraisal
FHA requires its own appraisal — not just a home inspection. The appraiser checks value AND safety. The property must meet HUD's Minimum Property Requirements: working utilities, no peeling paint, safe structure.
Close and Move In
Once the appraisal passes and your loan is approved, you close. Bring your 3.5% down payment plus closing costs (FHA allows the seller to cover up to 6% of closing costs). You must move in within 60 days.
Documents You'll Need
Things to Watch Out For
Mortgage Insurance Premium (MIP)
FHA charges 1.75% upfront (rolled into the loan) plus 0.85% annually. Unlike conventional loans, FHA MIP stays for the life of the loan unless you put 10%+ down.
Property Condition Requirements
FHA won't finance a fixer-upper unless you use the 203(k) renovation loan. The property must be safe, sound, and secure. Peeling paint, broken windows, or roof issues can kill the deal.
Loan Limits
FHA has a maximum loan amount by county. In most areas it's around $472K for a single-family home. High-cost areas go up to $1.15M. Check your county at entp.hud.gov/idapp/html/hicostlook.cfm.
PodLuxe Pro Tips
Stack programs. Use FHA financing + state down payment assistance + seller-paid closing costs. You could buy a $150K property with under $1,000 out of pocket.
HUD $100 down program. On select HUD properties, FHA buyers can get in for just $100 down instead of 3.5%. Look for the "$100 Down" tag on HUD listings.
FHA 203(k) for fixer-uppers. Found a cheap tax deed property that needs work? The 203(k) loan finances the purchase AND renovation in one mortgage. That $30K house with $40K in repairs becomes one $70K loan.
Owner-occupant advantage. On HUD homes, owner-occupant buyers using FHA get 15 days to bid before investors. This is your edge — use it.
Official FHA info: hud.gov/buying/loans