FHA Loan Calculator
Calculate your FHA mortgage monthly payment, including the 1.75% upfront mortgage insurance premium (UFMIP) and annual MIP. See FHA vs conventional comparison, total interest, and eligibility check — free, private, and instant.
| Metric | FHA Loan | Conventional 5% Down | Difference |
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How FHA Loans Work in 2026
An FHA loan is a mortgage insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development. The FHA does not lend money directly — it guarantees loans made by approved lenders against borrower default. This guarantee allows lenders to offer lower down payments (as little as 3.5%) and accept lower credit scores than conventional mortgages typically allow. In exchange, FHA borrowers pay two forms of mortgage insurance: a one-time upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount and an annual mortgage insurance premium (MIP) ranging from 0.15% to 0.75% based on loan term, loan size, and loan-to-value ratio.
The 2026 FHA loan limit baseline is $524,225 for a single-family home in low-cost counties, rising to $1,209,750 in high-cost areas (Hawaii, Alaska, and certain metros), per hud.gov. UFMIP is almost always financed into the loan rather than paid at closing. Annual MIP is collected monthly and lasts for the full loan term when the down payment is less than 10%, or for 11 years when the down payment is 10% or more.
FHA Eligibility & Down Payment Rules
FHA eligibility is more flexible than conventional financing in several ways:
- Credit score 580 or higher: Qualifies for the 3.5% minimum down payment.
- Credit score 500–579: Still eligible, but requires 10% down payment.
- Debt-to-income ratio: Typically capped at 43%, though some FHA-approved lenders allow up to 50% with compensating factors.
- Two-year employment history: Stable employment in the same field is preferred, though gaps are accepted with explanation.
- Primary residence only: FHA loans cannot be used for investment properties or vacation homes — the borrower must live in the home as their primary residence.
- Property condition: The home must pass an FHA appraisal showing it meets HUD's minimum property standards for safety, security, and structural soundness.
- Mortgage insurance is required: Both UFMIP and annual MIP apply regardless of down payment amount.
FHA vs Conventional: When Each Wins
Choose an FHA loan when your credit is below 680, your down payment is under 5%, or you have non-traditional credit history. The lower entry barrier outweighs the lifetime MIP cost. Choose a conventional loan when your credit is 720+ and you can put 20% down — you avoid PMI entirely and get the best market rates. Between those extremes, run both through this calculator to compare. Conventional 5% down with PMI often beats FHA over a 30-year horizon for borrowers with 700+ credit, because PMI cancels at 78% LTV while FHA MIP is permanent for < 10% down.
Streamline Refinance Option
An often-overlooked FHA advantage is the FHA Streamline Refinance — if you already have an FHA loan and rates drop, you can refinance with no appraisal, no income verification, and minimal credit check. This makes future refinancing nearly automatic. UFMIP refunds are partially available within the first 36 months when you refinance to another FHA loan, reducing the cost of the second UFMIP charge. Use the FHA Streamline Refinance Calculator to model that scenario.
Total Cash to Close on an FHA Loan in 2026
The 3.5% down payment is only one piece of the cash you bring to an FHA closing. On a $350,000 FHA purchase you typically need: $12,250 down payment (3.5%), $7,000–$17,500 closing costs (2–5% of price for lender fees, title, recording, prepaids), $2,000–$3,000 escrow setup for property tax and homeowners insurance reserves, and an upfront $5,910 UFMIP that is almost always financed into the loan (not paid in cash). Net cash to close usually lands between $21,000 and $33,000 on a typical $350K FHA purchase. Per CFPB FHA loan guidance, FHA allows sellers to contribute up to 6% of the purchase price toward your closing costs, so negotiating seller concessions can cut your out-of-pocket cash by $10,000+ on a $350K home.
Last updated: June 2026. Rates and limits per hud.gov, federalreserve.gov, and CFPB FHA loan guidance. Verify current FHA limits for your county at hud.gov before applying.