An FHA loan can get you into a house with as little as 3. 5% down. For first-time buyers or anyone with less-than-perfect credit, that's a game changer.
But those low upfront requirements come with real costs you need to understand before signing.
FHA loans are insured by the Federal Housing Administration and issued by approved lenders. They exist to help lower-income and first-time buyers access homeownership. The trade-off?
Mandatory mortgage insurance — and it works differently than conventional PMI.
What are the FHA down payment requirements?
The minimum down payment depends on your credit score. With a score of **580 or higher**, you can put down just **3. 5%**.
With a score between **500 and 579**, you need **10% down**. Scores below 500 aren't eligible for FHA financing.
Individual lenders can set higher requirements than the FHA minimums — these are called overlay requirements. Even if the FHA approves a 580 score, your lender might require 620 or higher. Always check with multiple lenders.
How does FHA MIP work?
Every FHA loan requires Mortgage Insurance Premiums (MIP). There are two components. First, an **upfront MIP of 1.
75%** of the loan amount — this is usually financed into the loan itself. Second, an **annual MIP of 0. 50% to 0.
55%** paid in monthly installments.
Here's what MIP looks like on a **$300,000 home purchase with 3.5% down at 6.8%**:
| Component | Amount | Notes |
|---|---|---|
| Upfront MIP (1.75%) | $5,066 | Financed into the loan |
| Annual MIP rate | 0.55% | $1,592 per year |
| Monthly MIP payment | $133 | Added to your monthly payment |
| MIP duration | Life of loan | Can't cancel with <10% down |
Calculate your full FHA loan payment
See your total monthly payment including principal, interest, and both MIP components. Compare down payment options and see how MIP changes over time.