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Residential Mortgage
FHA Home Loans
Government-backed loans insured by the Federal Housing Administration. Designed for first-time homebuyers and those with lower credit scores or smaller down payments.
Is This Loan Right for You?
An FHA loan is right for you if you are a first-time homebuyer, have a credit score as low as 580, or need a low down payment option of just 3.5%. It is especially helpful if your credit history is limited or you have had past credit challenges. Insured by the Federal Housing Administration under HUD guidelines, FHA loans allow borrowers with scores between 500 and 579 to qualify with 10% down. Loan limits range from $498,257 to $1,209,750 depending on your county, and the maximum debt-to-income ratio can reach 50%, more generous than conventional programs. You will pay an upfront mortgage insurance premium of 1.75% plus an annual MIP of 0.55% on 30-year loans with less than 10% down. Compared to conventional loans that require a 620 credit score minimum, FHA provides a more accessible path to homeownership. Choose FHA if you need the lowest possible barrier to entry for purchasing a primary residence.
Side-by-Side
FHA vs Conventional — How Do They Compare?
FHA loans offer lower barriers to entry for first-time buyers and borrowers with less-than-perfect credit.
| Feature | FHA Loan | Conventional |
|---|---|---|
| Min Credit Score | 580 | 620 |
| Min Down Payment | 3.5% | 3-5% |
| Mortgage Insurance | MIP for life of loan | PMI removable at 80% LTV |
| Upfront Insurance Fee | 1.75% UFMIP | None |
| Loan Limits | $524,225–$1,209,750 per HUD | $806,500 per FHFA |
| DTI Flexibility | Up to 57% | Typically 45% |
| Gift Funds for Down Payment | 100% allowed | Varies by program |
| Property Standards | Strict HUD standards | More flexible |
"My Credit Score Is Too Low for a Mortgage" — No It's Not
Requirements
What Are the FHA Requirements?
Min Credit Score
580+
Min Down Payment
3.5%
Max LTV
96.5%
Max DTI
50%
Loan Limits
$498,257 (floor) to $1,209,750 (ceiling) depending on county (per HUD/FHA annual limits)
PMI / MIP
Upfront MIP of 1.75% + annual MIP of 0.55% for 30-year loans with less than 10% down (for the life of the loan)
Occupancy
Primary residence only
Features
Key Features
- Down payments as low as 3.5%
- Credit scores accepted as low as 580
- Available in 10, 15, 20, 25, or 30-year fixed and adjustable terms
- Gift funds allowed for down payment
- Mortgage insurance premium (MIP) required
Process
How It Works
1
Pre-Qualification
We assess your credit score, income, and debts to determine FHA eligibility and estimate your maximum loan amount with the low 3.5% down payment.
2
Application & Documentation
Submit your application along with income documents, bank statements, and identification. We order the FHA appraisal, which includes property condition requirements.
3
Underwriting & Approval
The FHA underwriter reviews your file against FHA guidelines, verifies the appraisal meets minimum property standards, and issues approval.
4
Closing & Funding
Sign your closing documents, pay your down payment and closing costs (including the upfront MIP), and take ownership of your new home.
Estimate Your Payment
20%
Results
Principal & Interest$2,128.97
Property Tax$416.67
Insurance$150
Total Monthly Payment$2,695.64
This information is not intended to be an indication of loan qualification, loan approval or commitment to lend. Rates, terms, and availability of programs are subject to change without notice.
Pros & Cons
What Are the Pros and Cons of FHA?
Advantages
- Lower credit score requirements than conventional loans (580 vs 620)
- Down payment as low as 3.5% makes homeownership more accessible
- Gift funds can cover 100% of the down payment
- More lenient debt-to-income ratio limits (up to 50% in some cases)
Considerations
- Mortgage insurance (MIP) is required for the life of the loan if down payment is less than 10%
- Upfront MIP of 1.75% adds to closing costs
- Property must meet FHA minimum property standards, which can disqualify some homes
FAQ
Frequently Asked Questions
Yes. FHA allows 100% of your down payment to come from gift funds from family members, employers, or approved down payment assistance programs. A gift letter is required documenting the funds are a gift, not a loan.
If you put less than 10% down, MIP is required for the life of the loan. If you put 10% or more down, MIP can be removed after 11 years. Many borrowers refinance into a conventional loan once they reach 20% equity to eliminate MIP.
Yes. FHA allows you to qualify 2 years after a Chapter 7 discharge or 1 year into a Chapter 13 repayment plan with court approval. You must have re-established good credit and have no late payments since the bankruptcy.
The upfront MIP is 1.75% of the loan amount. On a $400,000 loan, that is $7,000. It can be financed into the loan so you do not need to pay it out of pocket at closing.
Yes. FHA loan limits vary by county. In 2024, the floor is $498,257 and the ceiling is $1,209,750 in high-cost areas. Los Angeles County has higher limits than the national floor. Check with us for your specific area.
Yes. FHA allows financing for 1-4 unit properties as long as you occupy one unit as your primary residence. This is a popular strategy for first-time buyers who want rental income to help cover their mortgage.
Local Expertise
Getting a FHA Loan in the San Gabriel Valley
NetCORE Lending™ is headquartered in Diamond Bar and has been helping borrowers across the San Gabriel Valley secure fha financing since 2015. We serve homebuyers and homeowners in Pomona, Walnut, Rowland Heights, West Covina, Chino Hills, Covina, La Verne, Glendora, San Dimas, Hacienda Heights, and City of Industry — as well as borrowers throughout California.
As a local mortgage broker, we understand the San Gabriel Valley real estate market — from the higher-value properties in Chino Hills and Diamond Bar to the more affordable options in Pomona and West Covina. Our team provides bilingual service in English and Vietnamese and shops 100+ wholesale lenders to find you the lowest available rate on your fha loan.
Call (714) 399-6361 to discuss fha options with a local loan advisor, or get pre-qualified online in 2 minutes.
Related
Also Consider
Explore other loan products that might be a good fit for your needs.
Conventional
A traditional mortgage not insured by the federal government. Ideal for borrowers with strong credit and stable income who want competitive rates and flexible terms.
CalHFA DPA
California Housing Finance Agency programs that provide down payment and closing cost assistance to first-time homebuyers. Includes the MyHome Assistance Program and Zero Interest Program (ZIP).
FHA 203(k)
FHA-backed loan that finances both the purchase of a home and the cost of renovations in a single mortgage. Ideal for buying fixer-uppers or upgrading your current home.
Fixed-Rate
Lock in a consistent interest rate and monthly payment for the entire life of your loan. Available in 15 or 30-year terms, providing long-term payment stability.
Ready to Get Started?
Apply online in minutes or call us to speak with a loan advisor about your FHA options.
Official Sources
This information is not intended to be an indication of loan qualification, loan approval or commitment to lend. Rates, terms, and availability of programs are subject to change without notice.
Reviewed by Joann Ton, Loan Officer (NMLS# 1461031) | Last updated: June 2026