If you don’t have the down payment savings to qualify for a conventional loan, an FHA home loan can make a big difference. FHA loans require as little as 3.5 percent down if you meet the credit score requirement, making them appealing to first-time homebuyers and others with limited funds for a down payment.
While FHA loans come with eligibility rules regardless of the mortgage lender you work with, the interest rate you qualify for and closing costs can vary. That’s why it pays to shop around carefully for an FHA mortgage lender. Bankrate has made this process easier for you by reviewing dozens of mortgage lenders based on several key criteria. Here is our guide to the best FHA mortgage lenders in 2024.
Best FHA mortgage lenders
Mr. Cooper
Mr. Cooper mortgage review
| Availability | Available in all U.S. states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands |
| Loans offered | Conventional, FHA, VA |
| Credit requirements | 620 for conventional loans; 580 for FHA loans; 600 for VA loans |
| Down payment minimum | 5% for conventional loans; 3.5% for FHA loans; none for VA loans |
| Where to find | Online |
Cardinal Financial
Cardinal Financial mortgage review
| Availability | Available in all U.S. states |
| Loans offered | Conventional, jumbo, FHA, VA, USDA |
| Credit requirements | 620 for conventional loans; 580 for FHA loans; 580 for VA loans; 580 for USDA loans |
| Down payment minimum | 3% for conventional loans; none for VA loans |
| Where to find | Branch locations and online |
LowRates.com
LowRates.com mortgage review
| Availability | Available in all U.S. states and Puerto Rico |
| Loans offered | Conventional, jumbo, FHA, VA, USDA |
| Credit requirements | 620 for conventional loans; 700 for jumbo loans; 500 for FHA loans; 500 for VA loans |
| Down payment minimum | 3% for conventional loans; 3.5% for FHA loans; none for VA loans and USDA loans |
| Where to find | Online |
U.S. Bank
U.S. Bank mortgage review
| Availability | Available in all U.S. states |
| Loans offered | Conventional, jumbo, FHA, VA, USDA |
| Credit requirements | 620 for conventional loans; 740 for jumbo loans |
| Down payment minimum | 5% for conventional loans; 3.5% for FHA loans; none for VA loans and USDA loans |
| Where to find | Branch locations and online |
Wells Fargo
Wells Fargo mortgage review
| Availability | Available in all U.S. states |
| Loans offered | Conventional, jumbo, FHA, VA, USDA |
| Credit requirements | 620 for conventional loans |
| Down payment minimum | 3% for conventional loans; none for VA loans |
| Where to find | Branch locations and online |
Summary: Best FHA mortgage lenders
| Lender | Credit requirements | Down payment minimum | Bankrate review |
|---|---|---|---|
| Mr. Cooper | 620 for conventional loans; 580 for FHA loans; 600 for VA loans | 5% for conventional loans; 3.5% for FHA loans; none for VA loans | Mr. Cooper mortgage review |
| Cardinal Financial | 620 for conventional loans;580 for FHA loans; 580 for VA loans; 580 for USDA loans | 3% for conventional loans; none for VA loans | Cardinal Financial mortgage review |
| LowRates.com | 620 for conventional loans; 700 for jumbo loans; 500 for FHA loans; 500 for VA loans | 3% for conventional loans; 3.5% for FHA loans; none for VA loans and USDA loans | LowRates.com mortgage review |
| U.S. Bank | 620 for conventional loans; 740 for jumbo loans | 5% for conventional loans; 3.5% for FHA loans; none for VA loans and USDA loans | U.S. Bank mortgage review |
| Wells Fargo | 620 for conventional loans | 3% for conventional loans; none for VA loans | Wells Fargo mortgage review |
Methodology
To determine the best FHA mortgage lenders, Bankrate evaluates more than 85 lenders for factors relating to affordability, availability and customer experience, assigning each a Bankrate Score out of five stars. Based on this methodology, the best FHA mortgage lenders generally have a Bankrate Score of 4.9 stars or higher. Note: The Bankrate Score considers a mortgage lender’s products and services only; it is not a reflection of a lender’s internal operations or practices.
How to find an FHA mortgage lender
The FHA (Federal Housing Administration) doesn’t lend FHA loans directly; instead, you’ll get an FHA loan from an FHA-approved mortgage lender. Many types of mortgage lenders, including banks and online shops, offer these loans. To find one:
- Ask your real estate agent. Your agent might know of lenders that offer FHA loans. Just be aware: You are never obligated to work with the lender your agent recommends.
- Use HUD’s FHA lender search tool. The search function allows you to search for FHA lenders by state, county and zip code.
- Explore options with an online comparison tool. Bankrate presents customized FHA loan rate quotes based on your needs and financial situation.
Who are the largest FHA lenders in the U.S.?
Along with Bankrate’s best FHA mortgage lender picks, here are the largest FHA lenders as of 2022 according to Home Mortgage Disclosure Act (HMDA) reporting. These are ranked based on number of originations and dollar volume.
| FHA mortgage lender | Loan originations in 2022 | Loan volume in 2022 |
|---|---|---|
| *American Advisors Group (AAG) is a reverse mortgage lender.
Source: Home Mortgage Disclosure Act data, aggregated by LendingPatterns |
||
| Rocket Mortgage | 73,003 | $16.1 billion |
| United Shore Financial (United Wholesale Mortgage) | 47,735 | $15.5 billion |
| LoanDepot | 25,288 | $7.1 billion |
| Fairway Independent Mortgage | 23,158 | $6.2 billion |
| Caliber Home Loans | 20,127 | $5.8 billion |
| CrossCountry Mortgage | 20,009 | $5.5 billion |
| Freedom Mortgage | 17,217 | $4.2 billion |
| American Advisors Group (AAG)* | 15,538 | $2.5 billion |
| DHI Mortgage Company | 15,127 | $5.1 billion |
| Pennymac | 12,930 | $3.1 billion |
FAQs about FHA loans
- Who is eligible for an FHA loan?
Here are the basic requirements to be eligible for an FHA loan:
- Borrow no more than $472,030 in most areas; you can find your area’s loan limit here
- Carry a credit score of at least 580 with a 3.5 percent down payment, or as low as 500 with a 10 percent down payment
- Have no higher than a 43 percent debt-to-income (DTI) ratio
- Provide proof of employment from the past two years
- Wait one year after a Chapter 13 bankruptcy, two years after a Chapter 7 bankruptcy and three years after a foreclosure, if applicable
- What are the benefits of an FHA loan?
FHA loans make homeownership more accessible to borrowers with lower credit scores, moderate income or limited savings. These mortgage products come with fixed interest rates, making your monthly mortgage payment more predictable. You could also qualify for a more competitive rate than you would with a conventional loan, even if you have less than perfect credit.
2023 Bankrate, LLC. A Red Ventures company. All Rights Reserved.
This story was originally published December 21, 2023, 3:38 PM.
source: star-telegram
