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Published: Jan 30, 2024 23 min read

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Why Trust Us

Money has been providing its readers with in-depth product reviews and financial advice for over 50 years. Our FHA loan lender reviews and rankings result from hours of research and analysis of more than 30 of the largest mortgage lenders in the United States. Our methodology included an evaluation of the minimum required credit score, debt-to-income ratios, average interest rates, variety of FHA loans offered, customer service ratings and the number of complaints filed against each lender, among other factors. We also relied on rankings and data from expert sources, including J.D. Power’s Mortgage Origination Satisfaction Study and the National Multistate Licensing System (NMLS).

Money’s key takeaways:

  • FHA loans are a solid option for first-time homebuyers and borrowers who have poor credit histories
  • Government-backed loans (like FHA loans) require lower down payments than other loan options. That down payment can be a gift from family or friends, or obtained through a down payment assistance program
  • The best FHA mortgage lenders offer ample educational tools, good customer service, flexible loan terms and competitive interest rates

Financing a home purchase can be nerve-wracking, especially for first-time homebuyers or borrowers with less-than-perfect credit histories. Federal Housing Administration (FHA) loans provide an affordable option that can help these Americans achieve their homeownership goals. We reviewed some of the largest mortgage lenders in the country and laid out our findings below. Keep reading to learn everything you need to know about FHA loans and how to choose the best lender for your situation.

Our Top Picks For Best FHA Loan Lenders

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Loan Amount
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Interest rate estimates for:
Poor/Fair Credit
7.44% - 9.16%
Good/Very Good Credit
7.13% - 9.0%
Exceptional Credit
7.13% - 7.73%

Best FHA Loan Lender Reviews

Pros
  • Competitive interest rates
  • Accepts DTI as high as 60%
  • Highly rated customer service
  • Fully online application process
Cons
  • Closing costs are higher than some competitors
  • Won’t approve borrowers with credit scores below 580

Rocket Mortgage (NMLS #3030), formerly known as Quicken Loans, is our top pick as the best overall FHA lender thanks to its flexible lending criteria, competitive interest rates, loan variety and top-notch customer service.

There are several FHA loan options available at Rocket, including 30 and 15-year fixed-rate loans, adjustable-rate mortgages, refinancing loans and manufactured (mobile) home loans. The debt-to-income ratio borrowers need to qualify for these loans is determined by the FHA’s automated underwriting system (AUS) and could go as high as 60%, which is among the highest of all the lenders we evaluated.

Rocket ranked second in J.D. Power’s 2023 Mortgage Origination Satisfaction Study (and first for servicing). Another plus: Since the lender services most of its loans, you probably won’t have to worry about dealing with a different company down the line.

HIGHLIGHTS
Loan types:
FHA, fixed-rate, adjustable rate, purchase, refinance, streamline refinance, manufactured home, conventional, jumbo, VA
Minimum credit score:
580
Minimum down payment:
3.5%

Pros
  • Low interest rates
  • Rate buydown
  • Closing cost credit
Cons
  • No renovation loans
  • Does not consider alternative proof of income

Pennymac (NMLS #35953) consistently offered among the lowest — and typically the lowest — interest rates during our evaluation period.

As of this writing, Pennymac is also offering a 1% rate buydown during the first year of an applicant’s loan, which can further reduce the rate. Plus, borrowers who qualify for a Buyer Ready Certification, a document detailing how large a loan they’re approved for, get a $1,000 credit to put towards their closing costs.

Pennymac has many FHA loan options, including purchase, refinancing and manufactured homes loans, but is not currently offering 203(k) renovation loans.

HIGHLIGHTS
Loan types:
FHA, manufactured home, conventional 15 and 30-year loans, flex-term loans, Jumbo, VA, investment property
Minimum credit score:
580
Minimum down payment:
3.5%
Pros
  • Top-rated customer service
  • Large variety of loans
  • Available nationwide
Cons
  • May sell your loan to another servicer
  • No information on fees or closing costs on website

When it comes to customer service, Fairway Independent Mortgage (NMLS #2289) leads the pack.

Fairway took the top spot in J.D. Power’s Mortgage Origination Satisfaction Study, which ranks lenders based on the amount of trust customers have in them, and how easy it is to use their services, among other factors. The company also has lots of positive reviews on Trustpilot and the Better Business Bureau website.

Fairway also offers a wide variety of FHA loans, including adjustable and fixed rate loans, streamline refinancing and 203(k) renovation loans. The application process can be started online or by contacting a loan officer directly.

HIGHLIGHTS
Loan types:
FHA, fixed-rate, adjustable rate, purchase, refinance, streamline refinance, 203(k) renovation loans, conventional, jumbo, VA, USDA, physician, reverse mortgages
Minimum credit score:
580
Minimum down payment:
3.5%

Pros
  • Offers grants to homebuyers
  • Gives discounts on origination fees
  • Above-average customer service
Cons
  • Higher credit score required to qualify
  • FHA refinancing is only available to existing Bank of America customers

Bank of America (NMLS #399802) offers the most generous grants and discounts among all the lenders we considered, making it our top pick for people seeking homebuyer assistance.

Customers who apply for a mortgage can receive up to $7,500 in credits toward their closing costs through Bank of America’s America’s Home Grant program. Members of the lender’s Preferred Rewards program, which provides benefits according to your account balances, tier can also qualify for a $200 to $600 discount on loan origination fees.

Bank of America ranks “above average” in customer satisfaction ratings by J.D. Power. You can apply for a loan online or in person at one of the bank’s nearly 4,000 branches.

HIGHLIGHTS
Loan types:
FHA, conventional, VA, fixed-rate, adjustable rate, purchase, refinance, jumbo loans
Minimum credit score:
600
Minimum down payment:
3.5%

Pros
  • Complete Rate Program analyzes consistent payments and deposits
  • Personalized rate quote
Cons
  • Not licensed to do business in New York

Guild Mortgage’s (NMLS #3274) Complete Rate Program takes a borrower’s complete financial health into consideration when evaluating an application, making it our top pick for borrowers who don’t have an established credit score.

The lender accepts recurring payments for things like rent, insurance and utilities to help establish an applicant’s creditworthiness, and bank statements to determine their income and debt obligations. In addition to FHA loans, Guild customers can also apply for VA and USDA loans through the Complete Rate Program.

Guild Mortgage has a credit score requirement of 540, making it a good choice for buyers with poor credit, in addition to those with no credit. You can get a ballpark rate quote using the lender’s online mortgage calculator, and a personalized quote by contacting a Guild loan officer directly.

HIGHLIGHTS
Loan types:
FHA, VA, USDA, conventional, doctor and bridge loans, refinancing, rate buydowns and down payment assistance programs.
Minimum credit score:
540
Minimum down payment:
3.5%

Pros
  • Offers a large variety of FHA loans
  • Above average customer satisfaction
  • Fast closing time
Cons
  • No interest rate or fee information on website
  • No live chat available

CrossCountry Mortgage (NMLS #3029) offers a wide range of FHA mortgages to fit a variety of financing needs.

The company’s FHA options include purchase, streamline and standard refinance, 203(k) renovation and manufactured home loans. CrossCountry also allows a parent or relative to co-sign on these loans, even if they won’t live in the home, which can help if you’re having credit issues.

Another perk is the company’s FastTrack Credit Approval program, which expedites the approval process and allows you to close on a loan in as little as 7 days.

HIGHLIGHTS
Loan types:
FHA, conventional, fixed-rate, adjustable-rate, refinance, streamline refinance, cash-out refinance, 203(k) renovation, manufactured home loans, VA, USDA, reverse mortgages
Minimum credit score:
580
Minimum down payment:
3.5%

Pros
  • Offers grants to homebuyers
  • Has an on-time closing guarantee
  • Above average customer satisfaction rating
Cons
  • Only accepts debt-to-income ratios of 43% or less
  • No online chat

Some lenders offer an on-time closing guarantee, which is a written promise to approve and fund your loan by a specific date — and if they miss the deadline, they’ll pay you cash. Of all the lenders we researched, Chase (NMLS #431646) pays the largest amount — $5,000 — to borrowers whose loans don’t close on time.

This guarantee can help defray any additional costs you incur if your purchase is delayed, like having to extend a rate lock period or getting a new preapproval letter.

Chase also offers a homebuyer’s grant, ranging from $2,500 to $5,000, for borrowers in select markets. The grant can be used to cover discount points, closing costs or make a down payment.

HIGHLIGHTS
Loan types:
FHA, VA, USDA, conventional, jumbo loans
Minimum credit score:
580, 500
Minimum down payment:
3.5%, 10%

Pros
  • Fast closing times
  • 24 underwriting possible
Cons
  • Not licensed in all states

Network Capital Funding (NMLS #11712) says it can close your loan in as little as 15 days, making it our choice for lenders with the fastest time to close.

Network Capital is a direct lender, which means there’s no middle-man or broker in between you and your mortgage provider. This allows borrowers to compete with all-cash buyers, since Network can review and underwrite the loan before you find a property (and in as little as 24 hours).

The lender isn’t rated by J.D. Power for customer satisfaction, but it does have a 4.8-star customer rating on Trustpilot and an A+ rating by the Better Business Bureau.

HIGHLIGHTS
Loan types:
FHA, Conventional 15 and 30-year loans, VA
Minimum credit score:
580
Minimum down payment:
3.5%, 10%

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Other companies we considered

Here are a few additional mortgage lenders that didn’t make our “best” list, but offer products that could be a good fit for your situation nonetheless.

PNC

PNC (NMLS #446303) offers special pricing, including a credit of up to $5,000 that can be applied to a down payment or closing costs on several of its loan products. PNC also offers some manufactured home loans.

Why we didn’t choose it: PNC didn’t make the cut because it has a higher minimum credit score (620) compared to other lenders we considered.

Veterans United Home Loans

Veterans United (NMLS #1907) is primarily a VA loan lender but it also offers FHA loans, including purchase, construction to permanent, streamlined refinance and manufactured home loans. The lender will accept a debt-to-income ratio as high as 65%, the highest we’ve seen. And since its loan officers are well-versed in the ins and outs of military life, the company and can provide specialized attention to members of the military.

Why we didn’t choose it: Veterans United isn’t one of our top picks because the minimum credit score required is 620, which is higher than other lenders we considered. The lender also doesn’t provide information on its website about FHA loans — borrowers need to contact a loan officer for details.

Wells Fargo

Wells Fargo (NMLS #399801) offers FHA purchase, refinance and streamline refinance loans. The interest rates offered are competitive compared to other lenders we considered, and the company’s network of brick and mortar banks is a big selling point for borrowers who don’t want to complete the mortgage process online.

Why we didn’t choose it: A large number of regulatory actions have been lodged against the lender by the CFPB and other regulatory agencies in recent years.

Freedom Mortgage

Freedom Mortgage (NMLS #2767) will accept a 3.5% down payment with credit scores as low as 550, one of the lowest standard score requirements of the lenders we considered. The lender also charges 3% to 4% in closing costs, which is the lowest we’ve seen.

Why we didn’t choose it: Freedom Mortgage has numerous regulatory actions, including a 2023 fine for receiving improper kickbacks.

What is an FHA loan?

An FHA loan is a government-backed mortgage loan guaranteed by the Federal Housing Administration. It has lower credit score and down payment requirements compared to conventional loans, which makes it a solid choice for many low to moderate-income borrowers, first-time homebuyers and borrowers with poor credit.

When looking for the best mortgage lender that meets your needs, remember to compare all products and services offered, not just the interest rate.

How do FHA loans work?

FHA loans are backed by the federal government, but the mortgage application, approval and funding processes are all done by private lenders like banks, credit unions, and online lenders.

The FHA, a government agency in charge of providing mortgage insurance, establishes certain borrower and property requirements and sets limits on the amount of money that can be borrowed. In some cases, you can refinance an existing mortgage through the FHA to get a better rate or term.

FHA loan requirements

These are the requirements borrowers need to fulfill in order to qualify for an FHA loan. Keep in mind that individual mortgage companies can set higher standards according to their own lending criteria.

  • A minimum down payment of 3.5% of the loan amount
  • A minimum credit score of 580, or 500 if the down payment is 10% of the loan amount
  • Have proof of income
  • Have a valid Social Security number
  • Borrowers with a previous foreclosure or bankruptcy can still qualify

Property requirements

Not all properties qualify for an FHA loan. In order to get FHA financing, the following requirements must be met:

  • The home must be used as your primary residence
  • The property can be a single-family home, condo or townhouse, but it can also have up to four residential units as long as you live in one of the units.
  • An FHA appraisal is required unless you’re applying for a 203(k)home renovation loan
  • Second homes, vacation or investment (house flipping, rentals) properties do not qualify.
  • You (or at least one of the borrowers if there are multiple buyers) must move into the home within 60 days of closing on the loan and live in it for at least one year
  • The title must be in your name or the name of a living trust

FHA loan limits

Conventional loans don’t have a maximum amount you can borrow (as long as you meet the lender criteria and can afford the payments), but FHA loans do. These limits are determined by the area’s median income and are updated annually by the U.S. Department of Housing and Urban Development (HUD).

For 2024, the national loan limit — which applies to most counties in the United States — is $766,550, but there are lower and higher caps depending on the home’s location and the number of housing units. There are also four exceptions to the limits listed above. Because of high construction costs, FHA loans in Alaska, Hawaii, Guam and the Virgin Islands have higher maximum limits:

You can check the limit in your target buying area using the FHA’s search tool.

One unit
Two units
Three units
Four units

Maximum limit in low-cost areas:

$498,257
$637,950
$771,125
$958,350
Maximum limit in high-cost areas:
$1,149,825
$1,472,250
$1,779,525
$2,211,600

Exception limits:

$1,724,725
$2,208,375
$2,669,275
$3,317,400

FHA loan costs and fees

As with any type of mortgage, an FHA loan requires you to pay closing costs, which include fees for loan origination, underwriting, credit reporting and title service. These costs can run between 2% and 6% of the loan amount and are typically paid upfront at the loan’s closing, though some lenders allow them to be rolled into the loan.

If your down payment is less than 20% of the loan, You’ll also have to pay a mortgage insurance premium (MIP) — a fee that protects the lender if you default on the loan. There are two insurance premiums: a standard 1.75% of the loan amount paid upfront, and a monthly premium based on the loan amount and the size of your down payment and will increase your monthly mortgage payment.

If your down payment is less than 10% of the purchase price, you will pay the MIP for as long as you hold the loan or until you refinance. If you pay 10% or more, you can eliminate the MIP after 11 years.

FHA loan pros and cons

As with any home loan, there are advantages and disadvantages to financing a home through a Federal Housing Administration loan program.

Pros
  • More flexible credit score and income requirements
  • No prepayment penalty if you pay the loan off early
  • Competitive interest rates compared to conventional loans
  • Down payments as low as 3.5% of the purchase amount, which can be covered by a gift or through a down payment assistance program.
Cons
  • Mortgage insurance premiums not easily eliminated
  • FHA property requirements can limit homebuying options
  • Loan amounts are limited depending on the home’s location
  • Cannot be used to buy an investment property unless it is also your primary residence

FHA loan types

There are several FHA mortgage products designed to meet different borrower needs. Knowing all the different options available can help determine if a traditional purchase loan is right for you. Not all lenders offer every option below, so make sure to ask about availability when shopping around.

FHA 203(b) loans

The most popular option among homebuyers, the 203(b) loan allows you to buy or refinance a home that may need some minor repairs. You can finance 96.5% of the home’s sales price and include the cost of repairs in the loan. This mortgage, also known as a conforming loan, can be a good option for first-time buyers or borrowers who have a low credit score or other financial difficulties.

FHA 203(k) loans

The 203(k) is the best option for buying or refinancing a home that requires major renovations. You can borrow up to 100% of the home’s sales price and include the cost of repairs and home improvements as long as the total amount borrowed is within the FHA’s loan limits for the area.

FHA energy efficient mortgage (EEM)

EEMs are complementary loans you can obtain alongside your FHA mortgage if you are buying an energy-efficient home or are planning on making energy-efficient improvements to a current or future property. The maximum amount of money you can borrow with this loan depends on the property’s value, and can’t exceed 5% of the sales price (up to a maximum of $8,000) or $4,000 (whichever is greater.)

Section 245(a) loans

You’ll have two options under this mortgage program: a graduated-payment mortgage (GPM), where borrowers start with a low monthly payment that increases over time, and a growing equity mortgage (GEM), which uses scheduled monthly payment increases to shorten the length of the loan.

FHA Title 1 loan

Title one loans can be used for any home repair or improvement that makes your home more livable, such as a roof repair or plumbing or heating system replacement. The money can be used for anything from minor repairs to purchasing new appliances.

Home equity conversion mortgage

Better known as reverse mortgages, HECMs allow homeowners 62 or older to access the equity in their home without having to make any additional monthly payments. The proceeds of the loan can be used for anything, including the purchase of another home.

FHA refinancing loans

You can refinance an existing home loan into an FHA loan and take advantage of a lower interest rate or more favorable loan term. If you are refinancing an existing FHA loan, the process can be done without income or asset verification. With a cash-out refinance loan, you can tap into the equity you’ve gained, similar to using a home equity loan or line of credit (HELOC).

FHA manufactured (mobile) home loans

The FHA has two loan options if you are interested in buying a mobile home: one for homes located in a mobile home park and one for buyers who own the land their home will be located on. There are loan and term limits depending on the type of loan, so it’s important to consult your lender for details.

How to apply for an FHA loan

The Federal Housing Administration does not lend money directly. Instead, it guarantees loans that are provided by private lenders like banks and credit unions. These financial institutions must meet FHA requirements and be approved by the government agency.

While minimum borrower eligibility criteria are established by the FHA, individual lenders can set their own guidelines, including minimum credit requirements. Your personal finances will also determine whether or not you qualify for a loan. Ask for details about these requirements when evaluating which mortgage lender to choose.

No matter which lender you go with, you’ll be asked to provide many (if not all) of the following documents:

  • Tax returns and W2s from the past two years
  • Bank statements from the previous two months
  • Financial statements from investment or retirement accounts
  • Proof of Social Security, disability or other income, if applicable
  • Employer name and address
  • Most recent pay stubs

Once you have chosen a lender and submitted the required documents, ask for a loan pre approval. This letter shows the seller of the home you’re interested in that you can obtain the financing needed to buy it.

FHA vs. Conventional loan

Some borrowers may be unsure about which loan best fits their needs — an FHA or conventional loan. Each loan type has pros and cons, and knowing the differences can help narrow down your options. Here are the major points to consider for each:

FHA loan
Conventional loan
Credit Score
500, 580
620+
DTI
43%, up to 57%
36%, up to 43%
Min. down payment
3.5%
3%
Mortgage insurance
Mandatory
Not required with 20% down
Home appraisal
Required
Required
Max. loan limits
Set by the FHFA
None

Alternatives to FHA loans

The best way to find the right mortgage is to shop around for different lenders and different loan types. Here are a few other options that could be a better fit for you:

  • Conventional loans: Conventional loans are offered by private lenders but are not guaranteed by the federal government. They do not have maximum loan limits, and can be obtained with a minimum 3% down payment. The credit score requirements tend to be higher than FHA loans and you will be required to pay private mortgage insurance (PMI) if you put less than 20% down.
  • VA loans: VA loans are guaranteed by the U.S. Department of Veteran Affairs and are a benefit for active duty and retired members of the armed forces and some members of their families. They require no down payment or mortgage insurance but do charge a funding fee.
  • USDA loans: USDA loans are guaranteed by the U.S. Department of Agriculture and are available to homebuyers planning on purchasing a home in a rural area. There is no down payment required, but credit score requirements tend to be higher than FHA loans.

More about FHA loans

FHA loans FAQs

What is the best loan for first-time home buyers?

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Many first-time home buyers find an FHA loan to be the best option because of its lower credit requirements, competitive interest rates and low down payment requirements. FHA loans can also be used in conjunction with down payment assistance programs to minimize the amount of upfront cash needed to purchase a home.

Do you need good credit for an FHA loan?

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No, you don’t. The minimum credit score established by the Federal Housing Administration is 500, but if your score is that low, you must make a down payment of at least 10%. If you have a credit score of 580 or higher, you can make a 3.5% down payment. Remember: these are the minimum standards set by the FHA, and individual lenders often have stricter requirements.

Is an FHA loan better than a conventional loan?

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It depends. FHA loans are easier to qualify for and tend to have lower interest rates than conventional loans. On the other hand, they also come with a maximum loan amount and sometimes require a larger down payment to secure. Carefully review the pros and cons of both before deciding which one best fits your needs.

Do FHA loans have private mortgage insurance?

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FHA loans do not require private mortgage insurance (PMI) but do require you to pay a mortgage insurance premium (MIP). you’ll be responsible for paying two types of mortgage insurance: an upfront fee of 1.75% of the loan amount, plus a monthly fee that is based on your down payment and the loan-to-value ratio. If you make a 10% or more down payment, you can eliminate MIP after 11 years; otherwise, you’ll pay MIP for the life of the loan.

Methodology

We started our search for the best FHA lenders by evaluating more than 30 of the largest mortgage lenders in the country. We then compared the following data points:

  • Minimum credit score
  • Maximum debt-to-income ratio
  • Interest rates on a sample $400,000, 30-year fixed-rate loan
  • Loan terms
  • Loan variety
  • Special offers or benefits offered
  • Customer satisfaction ratings as collated by J.D. Power, Trustpilot and the Better Business Bureau
  • Number of complaints against the lender lodged with the Consumer Financial Protection Bureau (CFPB) and the National Mortgage Licensing ServiceCK

Our top picks have a combination of competitive loan rates, loan variety, flexible credit and DTI requirements and above-average customer service.

Summary of Money’s Best FHA Loan Lenders of 2024