FHA Loan MIP Calculator: Estimate Additional Loan Payment Costs

Guide to FHA Loans: Requirements, Benefits & More

FHA mortgages are a popular home loan option. They allow buyers to qualify with a low down payment and offer flexible underwriting guidelines. FHA loans are insured by the Federal Housing Administration, an agency of the U.S. Department of Housing and Urban Development (HUD).

The FHA does not actually lend money to homebuyers. Here is how the program works:

Borrowers apply for home loans with FHA-approved lenders such as banks, credit unions and mortgage companies. Their applications are evaluated according to HUD guidelines.

If approved, the loan is funded by the lender and insured by the FHA. The homebuyer pays for mortgage insurance. With the mortgage insured against default, the lender‘s risk of a borrower failing to pay is reduced. Therefore, the lender is able to approve mortgages for homebuyers with smaller down payments.

Read on for details that will help you decide if FHA loans are for you, including how FHA loans stack up to conventional loans and an overview of loan qualification requirements.

FHA vs. Conventional
Loan Calculator

Should you go with an FHA or conventional mortgage?

Let hard numbers guide your loan decision.