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Buy a Home With as Little as 3.5% Down
An FHA loan can make it easier to buy a home when a large down payment or perfect credit is standing in the way. Shop 100+ lenders to find the right FHA loan for your scenario.
- As little as 3.5% down
- 580+ credit for maximum 96.5% financing
- Gift funds & down payment assistance allowed
- In-house underwriting
- 10–21 day closing for eligible loans
- No impact on credit
- Takes 1 min
- No docs needed
3.5%
Minimum down payment
for qualifying borrowers
580+
Credit score for maximum
96.5% financing
10–21
Days to close
for eligible loans
100+
Wholesale lenders shopped
for your scenario
3.5%
Minimum down payment
for qualifying borrowers
580+
Credit score for maximum
96.5% financing
10–21
Days to close
for eligible loans
100+
Wholesale lenders shopped
for your scenario
Is an FHA Loan Right for You?
FHA loans aren't only for first-time home buyers. They can work for repeat buyers too. An FHA loan may be worth comparing if you:
See if you qualifyHave Limited Savings for a Down Payment?
Qualified borrowers can purchase with as little as 3.5% down with a 580+ qualifying credit score.
Instead of spending several more years saving, you may be able to begin your home search now.
HUD-backed FHA loans can require as little as 3.5% down, and the required investment may come from approved sources such as:
- your own funds
- eligible gift funds
- down payment assistance programs
A quick review can help you understand whether you qualify and how much cash you may still need at closing. No obligation.
Have Less-Than-Perfect Credit?
FHA guidelines allow more flexibility than many conventional programs.
Your credit score does not have to be spotless to qualify:
- 580+ can qualify for maximum 96.5% financing
- 500–579 may qualify with at least 10% down
Income, debts, payment history and the rest of your file are also considered, so a lower score alone does not decide the outcome.
Need Help With Upfront Costs?
Eligible gift funds and down payment assistance can be used in qualifying FHA transactions.
Your cash to close does not have to come entirely from your own savings:
- Gift funds from eligible sources, properly documented
- Down payment assistance programs paired with your FHA loan
- Seller contributions of up to 6% toward eligible closing costs and prepaid expenses
Have a More Complicated Loan File?
Higher debt levels or past credit issues don't necessarily mean FHA is off the table.
FHA has room for files that other programs turn away:
- Higher debt levels, with up to 50% DTI through automated underwriting
- A non-occupant co-borrower to add qualifying income
- Manual underwriting when the file requires it
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FHA Loan Requirements
You don’t need to figure out every FHA guideline before getting
pre-approved. Find out how much you qualify for today
500+ Reviews from
FHA Loan Requirements
Down Payment
The minimum FHA down payment is generally 3.5% for qualifying borrowers with a 580+ score, from your own funds, eligible gift funds or qualifying assistance programs.
Credit Score
Scores from 500–579 may qualify with at least 10% down, while 580+ can qualify for maximum 96.5% financing.
Debt-to-Income Ratio
Austin Capital Mortgage’s current FHA guidelines allow up to 50% DTI through automated underwriting, depending on the overall file.
Income
Your income must be documented and reasonably expected to continue. FHA can accommodate salaried, self-employed and qualifying rental income.
Primary Residence
Standard FHA purchase financing is designed for your primary residence, rather than a vacation home or investment property.
Property
Eligible properties include single-family homes, FHA-eligible condos, duplexes, triplexes, fourplexes and certain manufactured homes.
You don’t need to figure out every FHA guideline before getting pre-approved. Find out how much you qualify for today
How Much Do You Actually Need to Buy With FHA?
This is where buyers often get confused. On a $300,000 home, 3.5% down equals a $10,500 down payment. But 3.5% down doesn't always mean 3.5% cash to close, and you may not have to pay every closing expense yourself.
Get a rate quoteYour total cash to close can also include:
Your down payment is only one part of what you bring to closing.
- Your down payment ($10,500 in this example)
- Closing costs
- Prepaid taxes and insurance
- Earnest money already paid, which reduces the total
- Seller and lender credits, permitted up to 6% under FHA limits
- Eligible gift funds
- Down payment assistance
So you shouldn’t assume you need only $10,500, or that you need to pay every closing expense yourself.
More Ways FHA Financing Can Work
Buy a 2–4 Unit Property
Duplexes, triplexes and fourplexes are eligible.
FHA financing isn’t limited to single-family homes. Eligible borrowers can purchase a 2–4 unit property, occupy one unit as their primary residence and potentially use qualifying rental income from the other units.
- Occupy one unit as your primary residence
- Rental income from other units may help you qualify
Non-Occupant Co-Borrower
Add qualifying income to your loan file.
A qualifying non-occupant co-borrower may be permitted in eligible FHA transactions, creating another path when one borrower’s income isn’t enough on its own.
- Adds a co-borrower’s income to help you qualify
- Additional LTV restrictions can apply depending on the relationship and property
Past Credit Challenges
Past credit events don't have to stop you.
FHA guidelines include pathways for borrowers with certain past credit issues. Waiting periods, payment histories and documentation requirements apply, so eligibility depends on your circumstances rather than the event alone.
- Collections and judgments
- Chapter 7 and Chapter 13 bankruptcies
- Foreclosures and short sales
Buy a 2–4 Unit Property
-
ELIGIBLE UNITS: 2–4
-
OCCUPANCY: One unit as primary residence
-
RENTAL INCOME: May be used to qualify
-
BEST FOR: Buyers who want rental income to help them qualify
Non-Occupant Co-Borrower
-
STRUCTURE: Non-occupant co-borrower added to the loan
-
BENEFIT: Adds qualifying income
-
RESTRICTIONS: Additional LTV limits may apply
-
BEST FOR: Buyers who need extra qualifying income
Past Credit Challenges
-
ELIGIBLE ISSUES: Collections, judgments, bankruptcies, foreclosures, short sales
-
REQUIREMENTS: Waiting periods & documentation apply
-
BEST FOR: Buyers rebuilding after a credit setback
FHA vs. Conventional:
Which Costs Less for You?
FEATURE
FHA Loan
Conventional Loan
Minimum Down Payment
As little as 3.5%
As little as 3% on eligible programs
Lower Credit Scores
More flexible
Typically stronger credit preferred
Mortgage Insurance
FHA MIP
PMI when applicable
Primary Residence
Yes
Primary, second home or investment depending on program
Multi-Unit Primary Residence
Eligible 1–4 units
Available under eligible programs
Gift Funds
Allowed
Allowed in eligible scenarios
DPA
May be available
May be available
Best Fit
Lower credit, limited down payment or more flexible qualification needs
Often stronger credit and potentially lower long-term costs
What About FHA Mortgage Insurance?
Upfront Mortgage Insurance
A one-time premium of 1.75% of the base loan amount.
FHA currently charges an upfront mortgage insurance premium of 1.75% of the base loan amount.
- Charged once, at closing
- Commonly financed into the mortgage rather than paid in cash
Annual Mortgage Insurance
Divided across your monthly mortgage payments.
An annual mortgage insurance premium is generally divided across your monthly payments.
- The exact percentage depends on the loan amount, term and loan-to-value ratio
- One more reason to compare the full FHA payment against conventional, rather than deciding on down payment alone
Upfront Mortgage Insurance
-
PREMIUM: 1.75% of the base loan amount
-
WHEN: Once, at closing
-
PAYMENT: Commonly financed into the mortgage
Annual Mortgage Insurance
-
PREMIUM: Depends on loan amount, term and LTV
-
WHEN: Ongoing
-
PAYMENT: Split across monthly mortgage payments
2026 FHA Loan Limits
How much you can borrow with FHA depends on the county and the number of units. For 2026, FHA's one-unit limits range from:
$541,287
Standard one-unit limit
in low-cost areas
$1,249,125
One-unit ceiling
in high-cost areas
2–4 Units
Higher limits for qualifying
multi-unit properties
$541,287
Standard one-unit limit
in low-cost areas
$1,249,125
One-unit ceiling
in high-cost areas
2–4 Units
Higher limits for qualifying
multi-unit properties
Are You Eligible for an FHA Loan?
You may qualify whether you are buying your first home, moving into a different home or returning to homeownership.
See if you qualifyYou may be eligible for an FHA loan if:
- You are purchasing a home rather than refinancing
- At least one borrower will occupy the home as a primary residence
- Your qualifying credit score is 580 or higher for maximum financing, or 500–579 with at least 10% down
- You are purchasing an eligible one- to four-unit property
- Your income, debts and proposed housing payment meet FHA underwriting requirements
- You have at least 3.5% down from your own funds, eligible gift funds or assistance programs
- The property is located in an eligible area
Not Sure Which Loan Program Fits Your Scenario?
You don’t need to figure out every FHA guideline before applying.
We will review your credit, income, property plans and estimated payment before explaining your available options.
Not Sure Which Loan Program Fits Your Scenario?
You don’t need to figure out every FHA guideline before applying.
We will review your credit, income, property plans and estimated payment before explaining your available options.
From Pre-Approval to Closing
Tell Us About Your Plans
Review Your Qualifications
Compare Your Options
Get Pre-Approved
Close With Your FHA Loan
A Better FHA Loan Experience
More Options. More Ways to Get to Yes.
Getting an FHA loan isn't only about meeting FHA's minimum guidelines. The lender reviewing your file matters too.
Get a rate quoteShop 100+ Lenders
You're not limited to one bank's pricing or one set of lending options.
In-House Underwriting
Your file is reviewed by an underwriting team we can work with directly instead of being passed between outside companies.
More Ways to Structure the Loan
From FHA and conventional to down payment assistance and specialty programs, we can compare more than one path before deciding which works best.
Dedicated Loan Officer
You have one person who knows your scenario and stays involved from pre-approval through closing.
Austin Capital Mortgage vs. Other Lenders
A better FHA experience starts with better support, broader options and fewer delays. See how Austin Capital Mortgage compares.
Other lenders/Banks
Other
Lenders shopped
100+
Limited to 1
FHA loans
Yes
Yes
Down payment assistance
Yes
Limited
In-house underwriting
Yes
Often no
Manual underwriting
Available
Varies
Dedicated Loan Officer
Yes
Varies
Closing time
10–21 days
Often longer
500+ Reviews from
30 Years of 5-Star Mortgage Service
Today's FHA Mortgage Rates
See live mortgage options based on your credit profile, down payment, loan amount, property and location.
FHA Loan FAQs
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration. Because FHA insures the lender against certain losses, lenders can offer qualifying borrowers lower down payments and more flexible qualification guidelines than some conventional loan programs.
Is FHA only for first-time home buyers?
No. You do not need to be a first-time home buyer to use an FHA loan. Repeat buyers can qualify as long as they meet FHA and lender requirements.
How much is the minimum FHA down payment?
Qualified borrowers with a credit score of 580 or higher may be able to put down as little as 3.5%. Scores between 500 and 579 generally require at least 10% down under FHA's maximum financing guidelines.
Can I get an FHA loan with bad credit?
Potentially. FHA allows lower qualifying credit scores than many conventional programs, but your score isn't the only factor. Income, debts, payment history, available assets and the rest of the loan file also affect approval.
Can I use gift money for an FHA down payment?
Yes. Eligible gift funds may be used when the source and transfer are properly documented.
Can I use down payment assistance with FHA?
Yes. FHA financing can be paired with eligible down payment assistance programs when both the borrower and transaction meet program requirements.
Can the seller pay my closing costs?
Seller contributions toward qualifying closing costs and prepaid expenses are permitted within FHA limits. Austin Capital Mortgage's current FHA guidelines allow interested-party contributions of up to 6%.
Why is my cash to close higher than my FHA down payment?
Your down payment is only one part of cash to close. Closing costs, prepaid property taxes, homeowners insurance and other expenses can increase the total, while earnest money, seller credits, gift funds and assistance can reduce it.
Can I buy a duplex with an FHA loan?
Yes. FHA can finance qualifying 2–4 unit primary residences. Eligible rental income may also be considered during qualification when applicable requirements are satisfied.
Does FHA require mortgage insurance?
Yes. FHA loans generally have both an upfront mortgage insurance premium and an annual mortgage insurance premium paid through monthly installments.
Is FHA better than conventional?
Not always. FHA can be more competitive for borrowers who need flexible credit or a low down payment. Conventional may cost less for borrowers with stronger credit or certain long-term goals. The best comparison uses your actual rate, payment, mortgage insurance and cash-to-close, not generic program averages.
Is homebuyer education required for FHA?
FHA does not universally require homebuyer education, though it may be required for certain first-time buyer or down payment assistance programs paired with your FHA loan.
Find the Right Way to Finance Your Home
You don’t have to figure out whether FHA is your best option before applying.
We’ll compare your available loan programs and show you:
- Whether FHA fits your scenario
- How FHA compares against conventional financing
- Your estimated payment and mortgage insurance
- The cash to close you may actually need
- Down payment assistance options available to you
Checking your options does not obligate you to proceed with a loan.
Find the Right Way to Finance Your Home
You don’t have to figure out whether FHA is your best option before applying.
We’ll compare your available loan programs and show you:
- Whether FHA fits your scenario
- How FHA compares against conventional financing
- Your estimated payment and mortgage insurance
- The cash to close you may actually need
- Down payment assistance options available to you
Checking your options does not obligate you to proceed with a loan.
Start Your Pre-Approval
Start your pre-approval to view instant live rates and review the right FHA mortgage path with a loan officer.
- No impact on credit
- Takes 1 min
- No docs needed
