# FHA loan

> An FHA loan is a mortgage from a private lender insured by the Federal Housing Administration. Minimum down payment, credit score, MIP and loan limits.

URL: https://mortgage-math-us.com/glossary/fha-loan/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**An FHA loan** is a mortgage made by a private lender and insured by the Federal Housing Administration, part of HUD. The insurance lets lenders accept a down payment as low as 3.5% with a credit score of 580 or higher, and the borrower pays for it through mortgage insurance premiums.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Minimum down payment | 3.5% | [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) | Oct 28, 2026 |
| Minimum score for maximum financing | 580 | [HUD Mortgagee Letter 2026-11](https://www.hud.gov/sites/default/files/hudclips/documents/2026-11hsgml.pdf) | Oct 8, 2026 |
| Upfront mortgage insurance premium | 1.75% | [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) | Feb 22, 2023 |
| Annual MIP, 30-year loan, under 5% down | 0.55% | [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) | Feb 22, 2023 |

## What the insurance costs

Every FHA loan carries an [upfront premium](https://mortgage-math-us.com/glossary/upfront-mortgage-insurance-premium/) of 1.75% of the base loan, usually added to the balance, plus an annual [mortgage insurance premium](https://mortgage-math-us.com/glossary/mortgage-insurance-premium/) collected monthly. With less than 10% down, annual MIP lasts for the life of the loan; at a starting loan-to-value of 90% or less it ends after 11 years.

> **Worked example: Minimum down on a $300,000 home**
>
> Down payment: $10,500, base loan $289,500. Upfront premium: $5,066, financed into the loan. Annual MIP at 0.55%: about $133 a month in the first year.

## Limits and uses

FHA loans are for homes you’ll live in, and the loan amount is capped by county: for a one-unit home in 2026, between $541,287 and $1,249,125. Scores from 500 to just under 580 need a larger down payment. The [FHA loans guide](https://mortgage-math-us.com/loan-types/fha-loans/) covers the full rules.

## Related terms

- [Conventional loan](https://mortgage-math-us.com/glossary/conventional-loan/), the usual alternative
- [Streamline refinance](https://mortgage-math-us.com/glossary/streamline-refinance/) for existing FHA borrowers

## Sources

- [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) — Minimum FHA down payment (Oct 28, 2026)
- [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) — FHA upfront mortgage insurance premium; FHA annual MIP, 30-year loan, more than 95% LTV; FHA annual MIP ends after 11 years when the starting LTV is at or below (Feb 22, 2023)
- [HUD Mortgagee Letter 2026-11](https://www.hud.gov/sites/default/files/hudclips/documents/2026-11hsgml.pdf) — FHA minimum score for maximum financing; FHA minimum decision credit score (90% LTV cap from 500 to 579) (Oct 8, 2026)
- [HUD](https://www.hud.gov/news/hud-no-25-145) — 2026 FHA loan limit floor (one-unit, low-cost areas); 2026 FHA loan limit ceiling (one-unit, high-cost areas) (2026 limit)
- [CFPB: FHA loans](https://www.consumerfinance.gov/owning-a-home/fha-loans/)

_General information, not financial advice._