An FHA loan is a mortgage insured by the Federal Housing Administration, designed to make homeownership accessible to borrowers who may not qualify for conventional financing. FHA loans offer several advantages including down payments as low as 3.5 percent, credit score minimums of 580 for the low down payment option, more flexible debt-to-income ratios up to 50 percent in some cases, and the ability to qualify with non-traditional credit history. FHA loans are available for primary residences only and have loan limits that vary by county, ranging from around 472,000 to over 1 million dollars in high-cost areas. The trade-off is mortgage insurance: FHA loans require both an upfront mortgage insurance premium of 1.75 percent of the loan amount and an annual premium of 0.55 percent for most borrowers, which remains for the life of the loan in most cases. At NMHL, FHA loans are one of our most popular products and we guide borrowers through every aspect of the process from application through closing.