What is a FHA mortgage?
A FHA mortgage is a type of home loan that is insured by the Federal Housing Administration (FHA), a government agency. These loans are designed to make it easier for first-time homebuyers and those with less-than-perfect credit to qualify for a mortgage. FHA loans typically have more flexible credit and income requirements than conventional mortgages, and they also require a small down payment of 3.5%. However, FHA loans come with certain restrictions and requirements, such as higher and/or longer lasting mortgage insurance premiums.
It is important to note that there are conventional loan programs, such as Fannie 97, Home Possible, and HomeReady, that require 3% down payment.
You can refinance a FHA loan with other loans in the future including refinancing with a conventional loan or another FHA loan using FHA streamline refinance, but you may be required to pay FHA upfront mortgage insurance premiums (MIP) again.
Note: There may be an upfront funding fee for FHA/VA loans. See our mortgage calculator for details.