The Best FHA Lenders
FHA loans are one of the most popular loan programs and account for more than 25% of all loans today in the United States. Although FHA loans are extremely common, finding the best FHA lenders to suit your needs is a critical step towards home ownership.
Most but not all lenders in the United States offer FHA loans due to their popularity. Lenders must apply to be an “FHA lender” through HUD (Department of Housing and Urban Development) and they also must adhere to the FHA guidelines when originating FHA loans.
What is an FHA Loan?
FHA loans are affordable loans offered by the Federal Housing Administration and are known for having low rates, a low-down payment, and also allow for low credit scores.
Many lenders love to offer FHA loans because they are insured by the Federal Housing Administration. This covers the lenders risk in the event that the borrower defaults on the loan.
How to Qualify for an FHA Loan
There are some basic minimum requirements to qualify for an FHA loan. If you can meet all of these requirements, then you will likely get approved for an FHA loan.
- The home must be your primary residence
- 1-4 unit properties are allowed
- You must be employed or self-employed for the past 2 years.
- A down payment of 3.5% is required for credit scores over 580, or 10% for scores below 580
- No bankruptcies, foreclosures or short sales permitted two years prior to applying for the loan.
These are the basic requirements needed to qualify for an FHA loan and you can read out full article on the FHA loan requirements.
If you are ready for a rate quote or would like to talk with someone about your loan details, then click to get connected with one of the best FHA lenders in your area.
5 Things to look for in an FHA Lender
The best FHA lenders will offer a full array of FHA loan products and are also not limiting their product offering to minimize risk. In our search for FHA lenders to be a part of our FHA lender match service, we make sure they all offer the following:
They Allow for credit scores as low as 500 – There are many FHA lenders who will not go below a 620 credit score (for example). In today’s credit environment, many home buyers have low credit scores. It is important for us to include lenders who are willing to go to the FHA minimum of a 500 credit score to help as many people as possible.
They offer FHA 203k rehab Loans – We like to recommend lenders who offer 203k rehab loans because there are many home buyers who do not have the funds to purchase the home and also make some needed repairs. Since FHA 203k rehab loans require a lot more work on the part of the FHA lender, many have decided not to offer these loan programs.
They offer FHA Streamline Refinances– Virtually every lender will offer the FHA streamline refinance. This is likely the easiest loan for an FHA lender to help you with since the process and paperwork is much less than the other loan programs.
They Allow for Small Loan Amounts – The truth is that lenders prefer not to work with small loan amounts. It requires the same amount of work on their part but with small returns when you factor the interest they will earn on a small loan of $50,000 for example. However, we realize that for many of you, the home you want is not expensive. It is for this reason why we are recommending FHA lenders who also will work with you even if you need a small loan.
They Allow for High Debt to Income (DTI) Ratios – The typical maximum DTI that lenders will approve for an FHA loan is 43%. However, we realize there are instances when that percentage simply will not work for the borrower. There are FHA lenders who will allow for DTI levels as high as 50% for an FHA loan.
Who are the Best FHA Lenders?
As an FHA lender match service, we are constantly searching for and partnering with FHA lenders who not only meet the characteristics referenced above, but who also are licensed in all 50 states.
Although this is titled “the best FHA lenders”, we realize that it is subjective and everyone’s needs are different. It is for this reason that we ask you to allow us to help match you with the best lender based upon your personal needs. Lenders are also constantly changing their guidelines and we are staying on top of all of that for you.
Our list of the best FHA lenders:
- Carrington Mortgage Services
- Amerisave Mortgage Corporation
- Homebridge Mortgage
- Academy Mortgage
- Flagstar Bank
The list above is not ranked in any particular order and we are not paid to list them here. We work with many more lenders than what you see above and the reality is the right lender for you may not be referenced on this list.
Your unique situation (credit score, down payment amount, home type, employment type and state you live in) may result in our recommending a different lender. We can usually make that determination in just a few minutes. One or two of the lenders on the list may be good for bad credit FHA loans, others for small loan amounts, high DTI, etc.
Critical FHA Articles to Read
If you take the time to read the following articles, you will have a great education on FHA loans and what you can expect before applying.
Online FHA Lender Reviews
There are many online reviews available from many different recognizable sources. It is important to understand that the majority of them are paid advertisements that are positioned to look like legitimate reviews. This includes many popular websites that you may recognize and trust.
To recap, not all FHA lenders are the same as they all do not offer every benefit or program outlined within the FHA guidelines. There are many quality lenders out there but with the constant changes in the FHA guidelines and lender offerings, it is important to rely on us to help guide you through this process and to get connected with a lender who is a great fit.
Are the best FHA lenders found online?
It was not long ago when all mortgages were dealt with face to face. Today, most of the transactions happen electronically and over the phone. The best FHA lenders may not be located within driving distance of your home and if you limit yourself to just face to face interviews with a lender, you may not get what you need.
Are All FHA Lenders the Same?
All FHA lenders are not the same because they may differ in the credit score minimums, loan amount minimums, rates and fees. It is important to shop around for a lender and take everything into consideration. Do not rely solely on one source.
FHA Related Articles
FHA vs Conventional Mortgage – Determine which mortgage type is best for you.
How to Pick a Lender – This article will dive into how to pick a mortgage lender regardless as to which type of program you are looking for.
Our FHA lender network is national and we can help you to find the best FHA lenders in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.