An FHA loan is one of the most popular mortgage options for first-time homebuyers — and for good reason. Backed by the Federal Housing Administration, FHA loans offer lower down payment requirements and more flexible credit guidelines than conventional loans, making homeownership accessible to a wider range of buyers.

At First Commerce Financial, we’re independent mortgage brokers licensed in Florida, Arizona, Texas, and Michigan. We shop your FHA loan across multiple wholesale lenders to find the best rate available — with no junk fees and complete transparency from day one.

What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration. Because the FHA insures the loan, lenders are willing to offer more flexible terms — including lower down payments and more lenient credit requirements — than they would on a conventional loan. The FHA doesn’t lend money directly; it guarantees the loan, which reduces the lender’s risk and opens the door for more buyers.

FHA Loan Requirements

Down Payment

One of the biggest advantages of an FHA loan is the low down payment requirement:

• 5% down with a credit score of 580 or higher
• 10% down with a credit score between 500 and 579
• Down payment can come from a gift from a family member or down payment assistance program

Credit Score

FHA loans are more forgiving on credit than conventional loans. While most conventional loans require 620+, FHA loans are available with scores as low as 580 — and in some cases lower. That said, a higher credit score will still get you a better rate.

Debt-to-Income Ratio

FHA loans allow a higher debt-to-income ratio than conventional loans — typically up to 50% in many cases, compared to 45% for most conventional programs. This can be the deciding factor for buyers who have student loans, car payments, or other existing debt.

Mortgage Insurance Premium (MIP)

FHA loans require mortgage insurance regardless of your down payment. This includes:

• An upfront MIP of 1.75% of the loan amount (typically rolled into the loan)
• An annual MIP paid monthly — currently 0.55% for most 30-year loans with 3.5% down

Unlike conventional PMI, FHA mortgage insurance stays for the life of the loan if you put less than 10% down. This is worth factoring into your long-term cost comparison.

FHA Loan Limits

FHA loan limits vary by county and are updated annually. For 2025, the baseline limit for a single-family home is $524,225 in most areas, with higher limits in higher-cost markets. We’ll tell you the exact limit for the county you’re buying in.

Who Is an FHA Loan Best For?

An FHA loan is typically a great fit if you:

• Are a first-time homebuyer with limited savings for a down payment
• Have a credit score between 580 and 680
• Have a higher debt-to-income ratio that doesn’t qualify for conventional financing
• Want to use gift funds for your down payment
• Have had past credit challenges but have rebuilt your financial standing

FHA vs. Conventional — Which Is Right for You?

FHA and conventional loans each have their place. Here’s a quick comparison:

• FHA: 3.5% down, credit score 580+, mortgage insurance for life of loan (if less than 10% down)
• Conventional: 3-5% down possible, credit score 620+, PMI drops off when you reach 20% equity

For buyers with strong credit and some savings, a conventional loan may ultimately cost less over time. For buyers who need more flexibility on credit or down payment, FHA is often the better path. We’ll run both scenarios for you so you can see the real numbers.

FHA Loans in Michigan, Arizona, Florida & Texas

FHA loans are available across all four states we serve. Whether you’re buying in the Detroit metro, the Phoenix Valley, Central Florida, or the Dallas area, we can help you navigate the FHA process from pre-approval to closing — with the same experienced team and zero junk fees in every market.

Frequently Asked Questions

Can I use an FHA loan to buy a second home or investment property?

No — FHA loans are for primary residences only. If you’re buying a second home or investment property, a conventional loan is the right path.

How long does FHA mortgage insurance last?

If you put less than 10% down, FHA mortgage insurance stays for the life of the loan. If you put 10% or more down, it falls off after 11 years. Many borrowers refinance into a conventional loan once they’ve built enough equity to eliminate MIP.

Can I get an FHA loan after a bankruptcy or foreclosure?

Yes — FHA has waiting periods rather than hard disqualifications. Typically 2 years after a Chapter 7 bankruptcy discharge and 3 years after a foreclosure, with re-established credit. We’ll look at your specific situation and tell you where you stand.

What types of properties can I buy with an FHA loan?

FHA loans can be used for single-family homes, 2-4 unit properties (if you live in one unit), condos (FHA-approved), and manufactured homes. The property must meet FHA minimum property standards.

Is the FHA rate the same as conventional?

FHA rates are often similar to or slightly lower than conventional rates — but the mortgage insurance adds to your total monthly cost. The all-in monthly payment is what matters, not just the rate. We’ll show you the full picture.

Ready to See If an FHA Loan Is Right for You?

We’ll pull your options, run the numbers, and give you a straight answer — no pressure, no obligation. Licensed in Michigan, Arizona, Florida, and Texas.

First Commerce Financial is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.

📞 Call us at (248) 459-5511

✅ Or start your pre-approval online today.