Core Insights - The Federal Housing Administration (FHA) has been insuring home loans since 1934, making it easier for lenders to issue mortgages, particularly to first-time home buyers and low-to-moderate-income households [1][3] - FHA loans are designed to extend homeownership opportunities to borrowers with lower credit scores or higher debt levels [3] FHA Loan Requirements - Borrowers must have a minimum credit score of 500 to qualify for an FHA loan, with a down payment requirement of 10% for scores between 500-579 and 3.5% for scores of 580 or higher [5] - The maximum debt-to-income (DTI) ratio for FHA loans is typically 43%, although higher ratios may be acceptable with strong credit scores or other compensating factors [6] FHA Loan Limits - For 2025, the FHA borrowing limit for a single-family home is set at $524,225 in most areas, with a maximum of $1,209,750 in high-cost areas [7] - In Alaska, Hawaii, Guam, and the Virgin Islands, the loan ceiling is even higher at $1,814,625 for a single-family home [8] Mortgage Insurance Requirements - FHA loans require borrowers to pay mortgage insurance premiums (MIPs), including an upfront mortgage insurance premium (UFMIP) of 1.75% and an annual premium as part of monthly payments [10] - If the down payment is less than 10%, MIP must be paid for the life of the loan; if 10% or more is put down, MIP can be canceled after 11 years [11] Home Appraisal - An FHA loan requires a home appraisal by an FHA-approved appraiser to ensure the property meets market value and HUD's minimum property standards [12] Income Requirements - There are no minimum or maximum income requirements set by the government for FHA loans, but lenders will assess affordability through the debt-to-income ratio [13] Disqualification Factors - Disqualification for an FHA loan can occur if the credit score is below 500, the DTI ratio exceeds 43%, or there is insufficient down payment [14] Qualification Difficulty - Qualifying for an FHA loan is generally easier than for a conventional mortgage due to lower credit score requirements and higher allowable DTI ratios, although FHA loans may incur higher costs due to ongoing mortgage insurance premiums [15]