{"id":321039,"date":"2024-11-11T02:22:57","date_gmt":"2024-11-11T07:22:57","guid":{"rendered":"https:\/\/www.houzeo.com\/blog\/?p=321039"},"modified":"2025-02-11T05:06:49","modified_gmt":"2025-02-11T10:06:49","slug":"fha-loan-down-payment-requirement","status":"publish","type":"post","link":"https:\/\/www.houzeo.com\/blog\/fha-loan-down-payment-requirement\/","title":{"rendered":"What Are the Requirements of an FHA Loan Down Payment?"},"content":{"rendered":"\n

FHA loans require just 3.5%<\/a> down, which translates to $15,488 on a $442,525 home. Whereas, you\u2019ve to pay $88,505 as per the 20% down payment requirement with a traditional loan.  <\/p>\n\n\n\n

It’s no surprise that FHA loans have become popular owing to their lenient credit scores and eligibility criteria. Coupled with this, 1 in 6<\/a> (15.5%) homebuyers opted for an FHA loan in 2024, up by 14.9% Y-O-Y. <\/p>\n\n\n\n

However, despite the low down payment requirement, there are other requirements you should get qualified for. It\u2019s essential to determine your eligibility and loan amount. Know how much loan you can qualify for with a preapproval. <\/p>\n\n\n\n

What Is an FHA Loan?<\/strong><\/h2>\n\n\n\n

The FHA mortgage is backed by the Federal Housing Administration<\/a>. FHA loans have lower down payment requirements, as compared to traditional loans. That makes it a common choice among first-time home buyers. <\/p>\n\n\n\n

These loans are designed to help buyers who have low to moderate income and find it difficult to afford higher down payments.<\/p>\n\n\n\n

What Are the FHA Loan Down Payment Requirements?<\/strong><\/h2>\n\n\n\n

The minimum down payment<\/a> for FHA loan is 3.5% with a credit score of 580. However, if your credit score is below 500-579, you’ve to put 10% down. <\/p>\n\n\n\n

For example, if you buy a house worth $300,000, you’ve to put down $10,500. However, with a credit score ranging between 500-579, your down payment will be $30,000. <\/p>\n\n\n\n

What Are the Rules for FHA Gifts Funds? <\/strong><\/h3>\n\n\n\n

FHA gift funds<\/a> can be used only for the primary residences and not for investment properties, cash reserves and closing costs. You can use the gift fund for your FHA loan down payment only when you receive it from your family, friends or relatives.<\/p>\n\n\n\n

You cannot accept gift funds from real estate agents, sellers and home builders. Also, if you decide to use your gift funds, you must provide a gift letter to your lender.<\/p>\n\n\n\n

Is Down Payment Assistance Available on an FHA Loan?<\/strong><\/h3>\n\n\n\n

A down payment assistance<\/a> program (DPA) is designed for home buyers with limited funds who can’t afford to purchase a house. <\/p>\n\n\n\n

The program provides funds to cover some or all of your down payment requirements. Government agencies and non-profit organizations offer these programs. <\/p>\n\n\n\n

Find Homes for Sale Under Your Specific Budget<\/strong><\/h2>\n\n\n\n
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$950K<\/strong><\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

How to Qualify for an FHA Loan?<\/strong><\/h2>\n\n\n\n

Here are some of the factors you must consider to be eligible for an FHA loan: <\/p>\n\n\n\n