FHA mortgage home loans are insured by the Federal Housing Administration (FHA) which can make it easier for you to qualify to purchase or refinance a home. This mortgage loan option offers flexible qualification guidelines to help people who might not qualify for a conventional mortgage.
FHA mortgage loans are home loans insured by the U.S. Government’s Federal Housing Administration (FHA). An FHA mortgage is an important option to consider when looking for a home, especially for first-time homebuyers or buyers with low-to-moderate incomes.
The Federal Housing Administration (FHA) was formed in 1934 to spur homeownership in the U.S. and facilitate home financing. FHA mortgage loans accomplish this through:
*Subject to underwriting review and approval.
Can you have a second mortgage with an FHA loan?
According to FHA guidelines, the FHA generally will not insure more than one mortgage for a borrower, with an exception for transactions where an existing FHA mortgage is paid off.
However, exceptions exist—such as relocation. If a borrower is relocating to an area outside reasonable commuting distance from their primary residence, they may obtain a second FHA mortgage without selling the original property. Other case-by-case exceptions include increases in family size or vacating a jointly owned property.
How can I get rid of my FHA mortgage insurance?
If you put down 10% or more at closing, FHA mortgage insurance automatically cancels after 11 years. If your down payment is less than 10%, monthly mortgage insurance remains for the life of the loan. In that scenario, the primary way to eliminate monthly mortgage insurance is by refinancing into a Conventional or VA loan once eligible.
How does an FHA loan compare to a Conventional loan?
It depends on your overall financial profile! Borrowers with established credit profiles and lower debt levels may benefit from a Conventional loan due to private mortgage insurance cancellation rules. For buyers building credit or carrying slightly higher debt-to-income ratios, an FHA loan often provides a more accessible path to homeownership. Your Fairway mortgage advisor can evaluate your scenario to identify the most advantageous solution.
What is an FHA 203(k) loan?
An FHA 203(k) loan combines the purchase (or refinance) price of a home with the cost of necessary renovations into a single mortgage. It is ideal for fix-up properties or homes needing updates prior to move-in.
Fairway offers the FHA Limited 203(k) loan (providing up to $35,000 for non-structural improvements like kitchens, bathrooms, flooring, or roofing) as well as the FHA Standard 203(k) for major structural renovations or projects exceeding $35,000.
Adjustable-Rate Mortgage (ARM)
An FHA adjustable-rate mortgage offers initial fixed payment periods (typically 5 to 10 years) before transitioning to periodic adjustments based on market indexes. An ARM may suit buyers planning to relocate or refinance within a few years rather than keeping the loan long-term.
Fixed-Rate Mortgage
An FHA fixed-rate mortgage provides payment stability and predictability. Your principal and interest payment amounts remain consistent throughout the life of the loan, making budgeting straightforward over a 15- or 30-year term.
FHA Streamline Refinance
An FHA Streamline Refinance allows homeowners with an existing FHA loan to refinance with reduced documentation and streamlined processing. Key requirements include:
Fairway is an FHA-approved lender but is not acting on behalf of or at the direction of HUD/FHA or the Federal Government. This material is not from HUD or FHA and was not approved by HUD or any government agency.
