Best FHA Loan Lenders of 2021

FHA mortgage loans are an attractive option for first-time homebuyers. If you’re looking for your first home and don’t have 20% of the home purchase price for a conventional loan down payment, FHA loans backed by the U.S. government can offer from 3.5% down payments, which can save you a bundle. There are some costs though, and different rates and terms with different lenders, so compare the best lenders to get the FHA mortgage that works for you. 

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1. J.G. Wentworth JG Wentworth


Minimum credit score: 500+ for 10% down payment, 580+ for 3.5% down payment

Minimum down payment: 3.5% based on qualifying credit

  • Useful reading materials on website
  • Submit all documents digitally
  • Experience with borrowers with low credit scores

J.G. Wentworth issues home loans for every type of borrower, including FHA loans. Its website offers plenty of free educational resources, which can be particularly useful if you’re purchasing your first home and would like to learn more from your lender without committing to anything.

Like a number of lenders, J.G. Wentworth has streamlined its application process to allow applicants to fill out paperwork and submit documents online. An additional advantage to J.G. Wentworth is its experience with borrowers with low credit scores: in addition to FHA loans, this lender only requires the bare-minimum credit score of 620 for conventional mortgages.

Best for: FHA refinance without appraisal

Best Perk: Digital document submission

View J.G. Wentworth Rates


2. Quicken Loans Quicken Loans


Minimum credit score: 500+ for 10% down payment, 580+ for 3.5% down payment

Minimum down payment: 3.5% based on qualifying credit

  • Largest FHA lender
  • Streamlined application process
  • Extensive education resources

Quicken Loans is the largest FHA lender in the U.S., and one of the largest lenders in general. It offers lots of educational resources to prospective borrowers, as well as a streamlined application process. Prospective borrowers may open an application for an FHA loan by talking to one of Quicken’s home loan experts or by applying online through its Rocket Mortgage platform (more on that below).

As the name suggests, everything about Quicken is designed to save time: it offers borrowers the option of filing documents online, the support team is available outside of regular bank hours, and it will provide you constant real-time updates to keep your FHA loan application moving.

Best for: FHA refinance without appraisal

Best Perk: Speedy applications

View Quicken Loans Rates


3. First Internet Bank First Internet Bank


Minimum credit score: 500+ for 10% down payment, 580+ for 3.5% down payment

Minimum down payment: 3.5% based on qualifying credit

  • Complete entire process online
  • Closure within 40 days
  • All rates advertised on home page

First Internet Bank is another one of the lenders that has abandoned traditional in-person applications in favour of an all-online solution. It offers a large selection of home loan, personal loan, and business loans, including FHA insured loans. Unlike many other lenders, it advertises its current rates on its home page; at time of writing, it was offering a 30-year fixed rate FHA loan at 4.25% interest, or 5.269% APR.

FIB will ask you to register an account and enter a few basic details before proceeding with your application. Although some people might find this off-putting, the good news is your information will be saved and you won’t have to enter it again.

FIB’s website has an extensive FAQ section, and customer support can be reached for any further questions by telephone (from 7am – 9pm weekdays and 9am – 3pm ET Saturdays, ET).

Best for: FHA loans with no underwriting fees

Best Perk: Large selection of lender

View First Internet Bank Rates


4. CrossCountry CrossCountry


Minumim credit score: 500+ for 10% down payment, 580+ for 3.5% down payment

Minimum down payment: 3.5% based on qualifying credit

  • Offers additional FHA loan for homes needing repairs
  • Responsive customer service and real-time updates throughout application
  • Extensive educational resources on website, including information on FHA loans

In addition to standard FHA loans, CrossCountry Mortgage offers 2 types of FHA 203(k) home loans: these allow borrowers to buy a home and finance qualifying improvements or repairs. CrossCountry makes this loan available in 2 forms: Streamline, allowing the borrower to finance up to $35,000 in renovations, though only certain types of repairs are eligible; Standard, allowing the borrower to finance a minimum of $5,000 in repairs with no maximum, although all repairs must be supported by the property appraisal.

Eligible non-structural repairs include: roofs, gutters, and downspouts; existing HVAC systems, plumbing and electrical systems, flooring and carpeting, interior and exterior paint, appliances (purchase and installation), accessibility improvements, exterior decks, patios and porches, basement finishing (non-structural), basement waterproofing, weatherization upgrades, window and door replacements, wall residing, septic and well systems.

CrossCountry’s FHA 203(k) is particularly useful, given that under the terms of a regular FHA loan, an FHA-approved appraiser must conduct an appraisal to ensure the property meets certain minimum standards. If a home is deemed to not be up to standard and the seller doesn’t agree to make the required repairs, the borrower must pay for the repairs at closing. Under CrossCountry’s FHA 203(k) loans, the additional costs of appraisers, consultants, contractors, and inspectors are added to the terms of the loan.

Best for: Standard FHA loans with up to $5,000 for repairs

Best Perk: Offers 203(k) FHA loans

Visit CrossCountry Mortgage

What Kind of Credit Do You Need for an FHA Loan?

Borrowers with a credit score of at least 580 can secure an FHA insured loan with just a 3.5% down payment, while borrowers with a lower credit score of 500-579 will be asked to pay 10% of the value of the loan as a down payment. Under the terms of an FHA loan, borrowers are also required to pay two types of private mortgage insurance (PMI): an upfront payment of 1.75% of the value of the loan, plus up to 0.85% per annum.

What Do You Need to Know About the FHA Loan Approval Process?

The process of applying for an FHA loan is similar to applying for a traditional loan, except it must be done with an FHA-approved lender, and you will need to show you meet the minimum credit score and other requirements specific to an FHA insured loan. 

FHA Loan Limits

You can take out FHA loans only up to certain limits, determined by median local home values in your county. Most locations fall under the standard FHA limits, but there are places that are considered high cost, and have higher limits. There are even places in several very high cost areas, with a special exception FHA loan limit. 

Standard Limits: 

Home TypeStandard FHA Loan Limits
1-unit property$421,100
2-unit property$543,000
3-unit property$656,350
4-unit property$815,650

High Cost Limits: 

Home TypeHigh-Cost FHA Loan Limits
1-unit property$636,150
2-unit property$814,500
3-unit property$984, 525
4-unit property$1,223,475

Special Exception Limits:

Home TypeSpecial Exception FHA Loan Limits
1-unit property$721,050
2-unit property$923,050
3-unit property$1,115,800
4-unit property$1,386,650

How to Apply for FHA Loans

In order to qualify for an FHA loan, you’ll need to show you meet all the prerequisites set by the Federal Housing Administration. Your lender will ask for the following:

  • Proof of verifiable income and proof that you’ve been in consistent employment for at least 2 years
  • Evidence that your monthly mortgage payments won’t exceed 30% of your borrower’s monthly income
  • Your agreement to pay Private Mortgage Insurance, although you can apply to stop paying PMI once you pay back 20% of the loan
  • If asked, you’ll need to prove you haven’t filed for bankruptcy in the past 1-2 years and haven’t had a foreclosure in the past 3 years

What does FHA Pre-Approval Mean?

A pre-approval is a written, conditional commitment from a lender for a specific loan amount and is usually valid for 60 to 90 days. Where FHA loans are concerned, your lender will check that you meet all the usual requirements for a loan as well as the minimum credit requirements. Pre-approval is something you apply for before finding a home or if you’re in the process of negotiating with a seller. In a competitive housing market, pre-approval can give a buyer a big advantage over rival bidders. In fact, some sellers prefer to see a written commitment from a lender as it reassures them that the house sale won’t fall through at a later stage.

How Do You Get Pre-Approved for an FHA Loan?

Just as it would if you were applying for a conventional loan, your lender will ask you for:

  • Personal information, such as driver’s license, state ID card, or social security number
  • Proof of income, in the form of pay stubs and W2 forms
  • Bank and investment statements to show you can pay the 3.5% or 10% down payment
  • Other financial information testifying to your ability to make payments, such as bills and reports on additional income sources

When assessing your application for pre-approval, your lender will also pull a hard credit inquiry in order to check whether you meet the minimum credit requirements (of 520 for a 10% down payment or 600 for a 3.5% down payment). A hard inquiry can affect your score for up to 2 years. However, the credit bureaus typically consider all inquiries made within a 45-day period to be a single inquiry. Therefore, if you’re shopping around for FHA loans or you’re unsure whether you’ll be approved, it’s worth applying to all your preferred lenders within a short period of time so as not to cause unnecessary damage to your credit score.

Can You Be Denied a Loan After Pre-Approval?

Pre-approval is a conditional commitment from the lender to provide you a loan to a certain amount, but the lender is not legally obligated to provide the loan. However, if you haven’t yet found a home or if you’re having trouble getting a seller to agree to sell you a home, then it’s worth going through the pre-approval process as this gives you an advantage over buyers who haven’t been pre-approved.

Because of the unique specifications, it’s worth seeking out a top FHA lender that has experience with these loans, such as the 5 lenders listed below.

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