FHA gets you in the door — then never lets go.

An FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD. The government does not lend the money — it insures the lender against loss, which lets that lender accept a lower credit score and a smaller down payment than a conventional loan would. You can buy with 3.5% down at a 580 credit score.

Only if you put at least 10% down. Below 10%, FHA mortgage insurance premium lasts the ENTIRE LIFE OF THE LOAN — it never cancels, no matter how much equity you build. At 10% or more down, it terminates after 11 years. This is the single most important and least understood fact about FHA lending, and it is the opposite of how conventional PMI works.

If you put down less than 10%, there is exactly one exit: refinance into a conventional loan once you have 20% equity. There is no cancellation request, no appraisal that helps, no automatic termination. Many FHA borrowers pay the premium for thirty years simply because nobody ever told them to refinance out.

580 gets you in at 3.5% down. Between 500 and 579 you can still qualify, but the down payment jumps to 10%. Many lenders impose overlays above the FHA minimum, so a 580 borrower may be declined at one lender and approved at another — which is precisely what a broker is for.

The Upfront Mortgage Insurance Premium is 1.75% of your base loan amount. Almost nobody pays it in cash — it is financed into the loan, which means you borrow it and pay interest on it for thirty years. On a $579,000 base loan that is roughly $10,100 added to what you owe on day one.

It depends entirely on your credit score. Below 640, FHA is often materially cheaper because its mortgage insurance is priced the same regardless of credit, while conventional PMI gets punitive at low scores. Above 680, conventional almost always wins because its PMI cancels. The only honest answer is to price both, which takes about ten minutes.

Yes — and in a high-rate market this is a genuinely valuable and widely ignored asset. A qualified buyer can take over your existing FHA loan at your original interest rate. If you lock 6% today and rates are 8% when you sell, your loan itself becomes a selling point that can command a higher price. Conventional loans are almost never assumable.

Generally yes, after a waiting period — commonly two years after a Chapter 7 discharge, one year into a Chapter 13 with on-time payments and court approval, and three years after a foreclosure. These are guidelines, not laws, and exceptions exist for documented extenuating circumstances.

Yes, up to 6% of the sales price — considerably more generous than conventional, which typically caps seller concessions at 3% for low-down-payment buyers. In a buyer's market this is often the single most valuable feature of the entire program.

Yes. HUD sets FHA loan limits annually by county, with a national floor and a ceiling for high-cost areas. Most expensive California counties qualify for the high-cost ceiling, but many purchase prices here still exceed it — at which point FHA is simply unavailable and you need conventional, jumbo, or a Non-QM program.