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Purchase

FHA — built for first-timers and credit-flexible buyers.

Backed by the U.S. Department of Housing and Urban Development, FHA loans were designed to help more buyers qualify with lower down payments and more flexible credit.

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Who FHA fits

First-time buyers. Buyers with credit scores in the 580–700 range. Buyers with lower down-payment savings. Buyers with prior credit events that have since been resolved.

Trade-offs to know about

FHA loans require both an upfront mortgage insurance premium (UFMIP) and a monthly mortgage insurance premium (MIP). For some buyers a 3-5% conventional with PMI is actually cheaper. We'll model both side-by-side.

Highlights

What you should know

3.5% down

For qualifying credit profiles, you can buy with just 3.5% down.

Flexible credit

FHA guidelines are typically more forgiving than conventional credit standards.

Mortgage insurance

FHA loans require mortgage insurance — we'll explain how it works and the trade-offs.

FAQ

Frequently asked questions

What is an FHA loan?
An FHA loan is a mortgage backed by the U.S. Department of Housing and Urban Development (HUD). It's designed to help more buyers qualify, especially first-time buyers and those with lower credit scores or smaller down payments.
What credit score do I need for an FHA loan?
Most FHA lenders look for a credit score of 580 or higher to qualify for the 3.5% down payment program. Borrowers with scores between 500 and 579 may still qualify with a 10% down payment, but lender overlays can apply. Richard Tocado Companies (NMLS #38652) can review your specific situation.
What is the minimum down payment for an FHA loan?
The minimum down payment on an FHA loan is 3.5% of the purchase price for borrowers with a credit score of 580 or higher. Down payment funds can come from savings, gifts from family, or qualifying down-payment assistance programs.
Do FHA loans require mortgage insurance?
Yes. FHA loans require both an upfront mortgage insurance premium (UFMIP), typically 1.75% of the loan amount, and an annual mortgage insurance premium (MIP) that's paid monthly. We'll model FHA against conventional 3% down so you can see which is actually cheaper for your situation.
Can I get an FHA loan after a bankruptcy or foreclosure?
Yes, in many cases. FHA generally allows financing two years after a Chapter 7 bankruptcy, one year into a Chapter 13 (with court approval), and three years after a foreclosure. Specific timelines depend on the circumstances and re-established credit.
How long does it take to close an FHA loan?
Most FHA purchase loans close in 30 to 45 days from contract signing, assuming the buyer's documents are complete and the appraisal is straightforward. Refinances often close faster.
Are FHA loan limits different in North Carolina?
FHA loan limits are set by county and updated annually by HUD. In Mecklenburg County (Charlotte), limits are typically aligned with the conforming loan baseline. Contact us for the current limit on the property you're considering.

Talk it through with our team.

Five minutes on the phone, or a few questions online. No pressure, no credit pull required.

Start your purchase quote Call (704) 800-4719