FHA Loans for Home Purchase & Refinance
Pro Mortgage Funding helps first-time and repeat buyers explore FHA financing in Michigan, Florida, and California. Discuss a primary-home purchase or eligible refinance with a licensed PMF loan officer.
Discuss your FHA mortgage options →Share your goals and property details for a loan officer review.
Guideline content checked . Your full scenario determines the available options.
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration and made by an approved lender. FHA insurance protects the lender; you are still responsible for repaying the loan.
Source: CFPB FHA loan overview.
A homebuying option beyond the first purchase.
FHA can help eligible first-time and repeat buyers purchase a primary home with a smaller down payment. Income, debts, credit history, property condition, and mortgage insurance all matter when comparing options.
Existing homeowners can also explore eligible refinance options, including FHA-to-FHA Streamline refinancing.
FHA Loans for First-Time and Repeat Homebuyers
FHA financing may be worth exploring if you want a lower down payment on an eligible home purchase or are reviewing refinance options.
A useful starting point if you:
- Want to compare standard home financing options.
- Have income, credit, and funds available for lender review.
- Plan to occupy an eligible property as your primary home.
- Want to compare lower down payment options.
FHA Program Highlights
- Loan amount
- Up to the applicable FHA county and unit-count limit. Your loan officer will confirm the current limit.
- Credit score
- Selected purchase options start at 500, subject to underwriting and lender requirements. Lower credit scores may require a larger down payment. Meeting a score threshold does not establish approval.
- Down payment / equity
- Lower down payment options may be available for eligible primary-home purchases. Other requirements apply. Closing costs, prepaid items, and any required reserves are separate.
- Occupancy
- Primary residence for purchase and standard refinance. Eligible existing FHA loans may have different occupancy rules for Streamline refinance.
- Property types
- Eligible 1–4 unit homes, approved condos, and selected one-unit manufactured homes. Additional property requirements apply.
- Loan purposes
- Purchase, rate-and-term refinance, cash-out refinance, and eligible FHA-to-FHA Streamline refinancing.
- Rate structure
- Fixed-rate and ARM options. ARM rates and payments can change after the initial fixed period.
- Interest-only
- Not offered in the standard FHA options described here.
- Amortization / repayment
- Fully amortizing options, with shorter and longer repayment terms available. Your loan officer will confirm the terms offered for your selected program.
- LLC closing
- Not available for the standard FHA home loans described here.
- Mortgage insurance / fees
- Upfront and ongoing premiums generally apply. The upfront premium can generally be financed into the loan, increasing the balance and overall cost. Ongoing insurance follows FHA duration rules, not conventional PMI cancellation rules.
Highlights describe different qualifying scenarios and may not be available together. Purchase financing requires an eligible primary residence. Refinance requirements vary by program. Credit, income, debts, property, and underwriting still apply. All loans are subject to approval and program availability.
Sources: HUD FHA Handbook 4000.1 and HUD upfront mortgage insurance. Lender requirements may be more restrictive.
Down payment is only one part of cash to close.
Use this illustrative worksheet with the amounts on your Loan Estimate. It explains the pieces; it is not a loan quote or an estimate of your costs.
- Start with the down payment
- The portion of the purchase price you contribute.
- + Loan and settlement costs
- Applicable lender, appraisal, title, recording, and other transaction charges.
- + Prepaids and initial escrow
- Items such as interest, homeowners insurance, and funds collected for taxes and insurance. These appear within the Loan Estimate’s closing-cost totals; count them only once.
- − Earnest-money deposit already paid
- A documented deposit is generally credited toward the transaction. It reduces the amount still due; it does not eliminate that part of your contribution.
- − Eligible credits and other adjustments
- Documented seller or lender credits may reduce permitted costs, subject to limits. They do not automatically replace your required down payment.
- = Estimated cash still due at closing
- Your Loan Estimate and final Closing Disclosure show the transaction’s actual calculation, including applicable adjustments.
Keep reserves separate. If underwriting requires reserves, those qualifying assets must remain available after closing. They are not another fee paid at the closing table.
Source: CFPB Loan Estimate explainer. Use your own figures; do not add prepaids twice or count the same funds as both spent closing funds and remaining reserves.
Compare FHA and Conventional with the
Cash to Close Calculator →
FHA Loan Benefits and Refinance Options
FHA purchase financing is for eligible primary residences. Refinance options have their own occupancy and eligibility requirements.
Another qualification path
FHA may fit borrowers whose credit or debt profile needs a different approach than conventional financing. Compare mortgage insurance and total borrowing costs as well as the interest rate.
Streamline refinance option
An existing FHA-insured mortgage on your primary home may qualify for a Streamline refinance with more limited documentation and underwriting. Payment history, seasoning, and benefit requirements apply; approval and savings are not guaranteed.
An assumable mortgage
A qualified buyer purchasing the property as a primary residence may be able to assume your FHA mortgage under its existing loan terms, subject to servicer approval and FHA requirements. The buyer may need funds to cover the difference between the purchase price and remaining loan balance.
FHA Home Purchase and Refinance Options
Purchase a home
Explore lower-down-payment options for an eligible primary residence.
Refinance
Review your existing mortgage and explore rate-and-term or cash-out options.
Explore FHA Streamline
Review whether an existing FHA-insured mortgage qualifies for a streamlined refinance.
Documents to Prepare for an FHA Loan
- Identity and recent income documents, such as pay statements, W-2s, or tax and business records when applicable.
- Bank or asset records showing funds for the down payment and closing costs.
- Details about debts, the property, and any existing mortgage you want to refinance.
The documents needed depend on your income and selected program. FHA Streamline refinances can have different documentation requirements.
FHA Loans in Michigan, Florida and California
Pro Mortgage Funding helps first-time and repeat buyers compare FHA purchase financing in Michigan, Florida, and California. If you’re buying in Novi, Northville, or South Lyon, our Michigan team can help you compare FHA and conventional options for the property you’re considering.
Availability remains subject to lender and program requirements.
FHA or conventional: which fits your plans?
Neither is the best choice for every borrower. Ask PMF to compare the complete costs and requirements for the same property and your available funds.
| Consideration | Conventional | FHA |
|---|---|---|
| Mortgage insurance | PMI is generally required with a smaller down payment or limited refinance equity. Eligible borrower-paid PMI can be canceled when applicable conditions are met. | Most FHA forward mortgages have upfront and ongoing mortgage insurance. Duration follows FHA rules and differs from conventional PMI cancellation. |
| Minimum down payment and funds needed | Lower down payment options may be available to eligible first-time buyers on selected one-unit primary-home purchase programs. Program, income, education, and underwriting requirements may apply. Closing costs and prepaid items are separate. | Lower down payment options may be available for eligible primary-home purchases, subject to credit, lender, and underwriting requirements. FHA generally also requires an upfront mortgage insurance premium that can be financed into the loan, increasing the loan balance and overall borrowing cost. Closing costs and prepaid items are separate. |
| Qualification | Review the agency underwriting path, credit, documented income, debts, property, and lender or insurer requirements. | FHA may allow a higher debt-to-income ratio than conventional financing, depending on underwriting findings, lender requirements, and the complete borrower scenario. Other credit, income, and property requirements still apply. |
| Overall cost | Compare rate, APR, mortgage insurance, fees, cash to close, and costs over the time you expect to keep the loan. | Compare the same items, including upfront and ongoing insurance. A lower interest rate alone does not establish a lower total cost. |
| Appraisal and required repairs | When an appraisal is required, it assesses value and property condition. Minor cosmetic issues may be accepted as-is, but safety, soundness, or structural problems can require repairs. Eligible loans may qualify for an appraisal waiver. | FHA appraisals also check HUD’s minimum property requirements, including observing attic areas that are safely accessible. FHA-specific rules, such as repairing defective exterior paint that exposes the surface beneath, can require repairs beyond those on some conventional loans. Additional inspections may be needed when deficiencies are found. |
| Homes built before 1978 | The home’s age alone does not rule out financing. FHA’s specific defective-paint rules do not automatically apply, but identified lead hazards or other health and safety concerns can require repairs or further evaluation. | The home’s age alone does not rule out financing. The appraiser must identify defective paint, such as peeling or chipping, on interior and exterior surfaces and require repairs under applicable lead-safe requirements. This does not mean every older home needs lead testing. |
| Streamline Refinance availability | A conventional refinance requires a new loan approval, with credit, income, and property review under the selected program. Eligible loans may have simplified verification or an appraisal waiver. | Eligible borrowers with an existing FHA loan may use an FHA-to-FHA Streamline refinance with reduced documentation and underwriting. Credit-qualifying and non-credit-qualifying options have different requirements; eligibility, payment history, and borrower-benefit rules still apply. |
| Can a buyer assume the loan? | Generally no for fixed-rate loans. Some adjustable-rate mortgages may permit assumption under the loan’s terms and approval requirements. | Yes, subject to FHA and servicer requirements. An eligible buyer can take over the existing FHA mortgage through the required assumption approval process. |
What does “assumable” mean? An approved buyer takes over the seller’s remaining mortgage balance, interest rate, and repayment term instead of replacing that mortgage with a new loan. The buyer still needs funds or separately approved financing to cover the difference between the purchase price and the assumed loan balance.
Assumption sources: HUD FHA Handbook 4000.1, Fannie Mae fixed-rate loan rules, and ARM assumption rules.
Sources: CFPB FHA overview, HUD FHA insurance explanation, CFPB PMI cancellation, and comparing Loan Estimates.
Explore PMF’s Conventional loan page →
Appraisal sources: HUD Handbook 4000.1, attic and property requirements and Fannie Mae property-condition rules. An appraisal does not replace an independent home inspection.
For most pre-1978 home sales, lead-based-paint disclosure requirements apply regardless of financing. See EPA’s disclosure guidance. FHA appraisal observations are not a lead-paint inspection or a substitute for a home inspection.
Refinance sources: HUD FHA Streamline requirements, Fannie Mae refinance requirements, and appraisal-waiver eligibility.
FHA Loan FAQs
What is an FHA loan?
It’s a mortgage insured by FHA and made by an approved lender. The insurance protects the lender; you remain responsible for repaying the loan.
Is FHA only for first-time homebuyers?
No. First-time and repeat buyers may qualify. We can review your plans and compare options.
How much down payment do I need?
The required down payment depends on your credit score, the property, and the lender’s underwriting requirements. Closing costs are separate.
What credit score is required?
Selected options start at 500, with a larger down payment below 580. Approval still depends on credit history, income, debts, property, and underwriting.
What is the maximum loan amount?
FHA loan limits vary by year, county, and number of units. Look up FHA limits by county with HUD, or tell us where you’re buying and how many units the property has so we can check the applicable limit.
Can I buy a two-, three-, or four-unit home?
Eligible 2–4 unit homes may qualify when you occupy one unit. Three- and four-unit properties have an additional rental-income self-sufficiency requirement. Ask us to review the property.
Can I finance a condo or manufactured home?
Some condos and manufactured homes qualify, subject to property, project, and lender requirements. We’ll help check the home you have in mind.
Will I pay mortgage insurance?
Generally, yes—an upfront premium and ongoing insurance apply. The upfront premium can generally be financed into the loan. We can explain the full cost and how long insurance applies.
Can gift funds or down-payment assistance help?
They may help in eligible scenarios. Gifts require acceptable donors and documentation; assistance programs have their own rules. Ask us what may fit.
Can I refinance or take cash out?
Yes, eligible refinances can include cash out. How much is available depends on equity and the complete scenario. Reach out to review the options.
What is an FHA Streamline refinance?
It replaces an existing FHA loan with another FHA loan using reduced documentation and underwriting. Payment history, seasoning, and borrower-benefit rules still apply. It is not automatic approval.
Can someone assume my FHA mortgage when I sell?
Yes, subject to the applicable FHA and servicer approval process. An eligible buyer takes over the remaining loan terms and must cover the difference between the price and loan balance.
Can I use FHA to buy a second home or investment property?
The purchase options described here require a primary residence. An eligible 2–4 unit home may qualify when you live in one unit.
Can I buy an older home or one needing repairs?
Often, yes. FHA appraisals include property-condition checks and may require repairs. Homes built before 1978 have specific defective-paint requirements. Age alone does not rule out financing.
Can I qualify with student loans or self-employment income?
Possibly. Your documented income and the payments counted toward your debts matter. We can review your repayment plan or business income without assuming approval.
How does FHA compare with conventional financing?
Compare available funds, credit and debt requirements, mortgage insurance, and total costs. Neither program is best for every borrower. We can help you compare both.
What happens after I submit my scenario?
A licensed PMF loan officer will review your goals and discuss possible next steps. An inquiry is not an approval or a commitment to lend.
Let's find your starting point.
Tell us about your property and financing goals.
Discuss your FHA mortgage options →Program availability and terms depend on your complete scenario and underwriting. This is not a commitment to lend.