Who FHA is actually for
FHA's superpower isn't the rate — it's underwriting flexibility. FICO down to 580 (3.5% down) or 500 (10% down), DTI up to 56.99% with compensating factors, and lenient on recent credit events (2 years post-bankruptcy, 3 years post-foreclosure). If you can qualify conventional, run both numbers — but FHA exists for borrowers who can't.
The permanent MIP problem
Pre-2013, FHA MIP dropped off at 78% LTV. Today, MIP is permanent for the life of the loan when down payment is <10%. The standard playbook: take FHA now to buy, then refinance to conventional once you hit 20% equity (typically 3–5 years) to drop the MIP.
FHA loan limits in 2026
Standard FHA limit follows FHFA conforming: $766,550 in 2025 across most counties, with high-cost areas (NY, CA, DC, HI) up to $1,149,825. Check your county's specific limit at HUD.gov.
FAQ
Can I use FHA on a rental?
Only if you live in the property as your primary for at least 12 months. FHA allows 2–4 unit owner-occupied (house-hack), which lets you rent the other units while qualifying for FHA terms.
Can I get rid of FHA MIP?
If you put 10%+ down, MIP drops after 11 years. If <10% down, MIP is permanent — the only way out is refinancing into a conventional loan once you have 20% equity.
FHA seller concessions limit?
FHA allows up to 6% seller-paid closing costs (vs. 3% for conventional <10% down). Major advantage when sellers are flexible.
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Last reviewed
June 2026. We re-check every figure on the platform on a rolling quarterly cycle.
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