A government-backed loan with flexible credit and down payment guidelines, designed to help more buyers become homeowners. 3.5% down, credit scores from 580, and competitive rates.
FHA loans are insured by the Federal Housing Administration. Because the government backs the loan, lenders can offer more flexible terms, lower down payments, lower credit-score minimums, and friendlier debt-to-income ratios.
They're not just for first-time buyers. Anyone using an FHA loan for their primary residence can qualify, as long as the property and borrower meet FHA standards.
The Federal Housing Administration doesn't lend money directly. Instead, the FHA insures the loan against default, which lets approved lenders, including Signature Home Mortgage, offer mortgages with smaller down payments and softer credit guidelines than a traditional conventional loan. That insurance is paid for through two layers of mortgage insurance premiums, an upfront premium rolled into your loan balance, and an annual premium collected monthly with your payment.
FHA loans are designed for primary residences, the home you actually live in. They can be used for single-family houses, two- to four-unit buildings if you occupy one unit, FHA-approved condos, and many manufactured and modular homes. Loan limits vary by county and reset every January. In most California counties, the FHA ceiling is substantially higher than the national floor, which is part of why this program works so well for buyers in the Los Angeles, Orange, San Bernardino, Riverside, and Ventura markets.
The big trade-off is mortgage insurance. On most modern FHA loans, the annual MIP stays on the loan for the entire term unless you refinance into a conventional loan once you have enough equity. That's why we always run the math two ways for first-time buyers, FHA today, then a conventional refinance once your loan-to-value drops below 80 percent. For many California families, that two-step plan is what makes the monthly payment work today without locking them into MIP forever.
FHA has specific guidelines for borrowers, properties, and loan amounts. Here's the short version.
580+ for 3.5% down. 500–579 with 10% down. Some lenders require higher scores than FHA's minimums.
3.5% minimum (can be gifted). Up to 100% of closing costs can be seller-paid or gifted.
Generally 43%, but FHA allows up to 50%+ with compensating factors.
FHA requires upfront MIP (1.75% of loan) and annual MIP. Annual MIP is paid for the life of the loan in most cases.
Must be your primary residence and meet FHA's minimum property standards. Single-family, condos, 2–4 units allowed.
FHA limits vary by county. Most California counties allow up to $1.149M for single-family homes (2026 limits).
No. Anyone can use an FHA loan as long as it's for a primary residence and they meet the requirements.
FHA itself allows 500 (with 10% down) or 580 (with 3.5% down). Many lenders require 620+ in practice.
Upfront MIP is 1.75% of the loan (can be financed). Annual MIP ranges from about 0.50%–0.85% of the loan balance.
In most cases, FHA MIP stays for the life of the loan. To remove it, you'd refinance into a conventional loan once you have 20% equity.
Yes, 100% of your down payment can be gifted by family, an employer, a charity, or a government down payment program.
Yes, with an FHA 203(k) renovation loan. It combines the purchase price + renovation costs into one mortgage.
Free pre-approval, no credit pull required to get started.