FHA loans are mortgage loans backed by the U.S. Federal Housing Administration that allow borrowers to qualify for low-interest loans with low down payment requirements. The best FHA loans make purchasing a home more accessible, even for borrowers who don't have perfect credit or a high income.
The best FHA lenders have flexible credit and income requirements and offer competitive rates with minimal lender fees. They also provide borrowers with a streamlined mortgage process, online applications, and responsive customer service. Here are our picks for the best FHA lenders.
Best Overall : Guaranteed Rate
Guaranteed Rate wins for best overall FHA lender thanks to their low rates, excellent reputation, and streamlined mortgage application process. While everything can be done online, they also have nationwide brick-and-mortar locations for borrowers who prefer to work with someone in person.
Easy and fast online application process
400+ brick-and-mortar locations
Higher credit score requirements
Four states have no branch locations
Guaranteed Rate is able to offer some of the best mortgage rates without sacrificing high-quality service, making it our top pick of the best FHA lenders. The company was founded in 2000 with the goal of improving the mortgage process for home-buyers.
It claims to have created the world's first digital mortgage, and its mortgage process is indeed very simple and streamlined. The online application takes only 15 minutes, all your documents can be uploaded electronically through the secure Transfersafe portal, and its FlashClose technology allows you to close on a home online within minutes. If you'd like to work with someone in person, Guaranteed Rate also has over 400 branch locations throughout the country, although you won't find branches in Mississippi, Nebraska, Vermont, or West Virginia.
This lender is more geared toward people with good credit and a decent income, as it requires a 620 credit score and a debt-to-income (DTI) ratio of less than 43% to apply for FHA loans. Creditworthy borrowers will likely qualify for very competitive rates with Guaranteed Rate, and the lender fees are quite low, which will help you minimize closing costs. It offers 3.5% and 10% down payment options.
Best for Bad Credit : Carrington Mortgage
Carrington Mortgage has one of the lowest minimum credit score requirements of all the best FHA lenders, making it perfect for borrowers with less-than-perfect credit. It offers USDA and VA loans too, which are also a good option if you have a low credit score.
Low minimum credit score requirement
Also offer USDA and VA loans
No online application
Loan rates, terms, and amounts not specified
Founded in 2007 and operating out of California, Carrington Mortgage specializes in single-family residential real estate for borrowers and investors. Borrowers who can't qualify for FHA loans elsewhere typically have better luck with Carrington Mortgage—it's flexible with qualification requirements and one of a very few FHA lenders to accept credit scores as low as 500. In addition to offering low credit FHA loans, it also offers VA loans and USDA loans with the same, more lenient qualification requirements.
If you don't have a lot of money for a down payment, you'll be glad to know that Carrington allows you to use gift funds, and your down payment for FHA loans only has to be 3.5% of the purchase price. You can opt for a 15- or 30-year loan, and although the loan rates and terms aren't publicly available, Carrington Mortgage borrowers generally report receiving a competitive rate given their credit score and reasonably low closing costs.
Unfortunately, you can't start the mortgage application process online as the website requires you to enter information and wait to be contacted by one of its team members. They also charge a fee to make mortgage payments online. Finally, if you prefer in-person assistance, you might be out of luck—Carrington Mortgage only has six branch locations nationwide (in Arizona, California, Connecticut, Florida, Indiana, and Maryland).
Best for Real Estate Investors : Rocket Mortgage
Rocket Mortgage by Quicken Loans has more flexible debt-to-income ratio requirements than many of the best FHA lenders, which real estate investors expecting to take on higher monthly mortgage payments may appreciate. The added convenience of being able to check in on everything online and through the Rocket Mortgage mobile app will also help busy investors keep tabs on their properties.
Flexible qualification requirements
Fully online mortgage process
Easy preapproval process
No brick-and-mortar locations
No renovation loans
Lender fees not specified
When you're investing in real estate and managing multiple properties, having everything streamlined and available 24/7 is crucial. As the online mortgage experience created by Quicken Loans, one of the most established names in mortgage lending, Rocket Mortgage offers a seamless experience from start to finish. Its online tools and mobile app also help you track everything on the go so you can easily stay on top of your investments, making it the best choice for using FHA loans to buy investment property.
While FHA loans typically require you to keep your monthly debt payments below 43% of your gross income, Rocket Mortgage may allow applicants with good credit to have a debt-to-income ratio of up to 57%. This comes in handy if you're investing in larger properties with higher monthly payments.
While you won't be able to visit any brick-and-mortar locations with this FHA lender, customers praise the simplicity and speed of Rocket Mortgage's online mortgage process. Its credit score requirements are on the lower end of the best FHA lenders, and it allows down payments as low as 3.5%.
Read the full Quicken Loans review.
Best for New Home-Buyers : Caliber Home Loans
Caliber Home Loans has stellar reviews when it comes to customer service, and it has extensive online resources and branches in all 50 states. Caliber Home Loans' ability to educate and guide borrowers through the home buying process makes them ideal for new home buyers.
Extensive resources for first-time homebuyers
Easy online and mobile applications
Branches in all 50 states
Mortgage rates and terms not specified
Higher credit score requirements
Caliber Home Loans is a nationwide lender with branch locations in all 50 states and an easy online application process. First-time home buyers will want to go with a lender that can guide them through unfamiliar territory and provide personalized service, and Caliber Home Loans does just that and earns the nod of this category. Customer reviews for its team of local experts are overwhelmingly positive, and this FHA lender's educational resources make it easy for you to navigate the home buying process online as well.
The closing process can be unexpectedly overwhelming for new home-buyers, but Caliber Home Loans makes that quick and easy, too. By leveraging a digital closing process, they've been able to help homebuyers close in as little as 10 days. Even the process of paying off your mortgage is made easy by its user-friendly mobile app. Automatic and one-time online mortgage payments with this lender are free.
You'll need to have a 620 credit score to go with this lender and a 3.5% minimum down payment. While Caliber Home Loans doesn't publish its mortgage rates, it does offer a QuickQuote tool that gives you a rate quote without affecting your credit.
Best for Customer Service : Chase Bank
Chase Bank is well established with a big network of brick-and-mortar locations and online customer service representatives, making it our top pick for FHA lenders with the best customer service. Programs like the Chase Closing Guarantee and Chase Homebuyer Grant are the cherry on top.
Guaranteed on-time closing
$2,500 to $5,000 toward closing costs in select areas
Easily see rates specific to your area
No 15-year FHA loans
Credit score requirement not specified
Application process isn't fully online
JPMorgan Chase & Co. is one of the biggest and most well-established financial institutions in the U.S., tracing its roots all the way back to the founding of The Manhattan Company in 1799. Over the years, Chase Bank has grown to include over 4,700 branch locations and an extensive remote customer support system that includes phone representatives, dedicated support accounts on social media, and a live chat feature.
The ability to get in touch with Chase anywhere at any time is only part of what makes it our choice as the best FHA lender for customer service. Chase also guarantees on-time closing or you get a check for $2,500. Applicants for FHA loans may also qualify for the Chase Homebuyer Grant, which gets you $2,500 to $5,000 off closing costs.
Chase doesn't publish credit score requirements, but most FHA lenders require a credit score of at least 580—especially if you plan to only put 3.5% down. With Chase, the entirety of your 3.5% down payment can be gift funds and there are no income limits to qualify. While most of the mortgage process is available online, you will have to speak to a home lending advisor to complete the application.
Read the full Chase Bank review.
The best FHA lenders offer a combination of excellent service, low rates, and flexible terms. Guaranteed Rate does just that. Their completely online application process and streamlined document transfer and closing technology make the mortgage process a breeze.
While this company is known for making the mortgage process completely digital, they also have hundreds of branch locations around the country for homebuyers who prefer that in-person touch. When it comes to getting the best deal, Guaranteed Rate offers competitive rates and low lender fees. You also have a variety of term and down payment options to choose from with their FHA loans.
Compare the Best FHA Lenders
|Company||Minimum Credit Score||Starting Interest Rate||Terms||Minimum Downpayment||Online Application|
|620||2.625%||15 or 30 years||3.5%||Yes|
Best for Bad Credit
|500||Not specified||15 or 30 years||3.5%||No|
|Rocket Mortgage by Quicken Loans
Best for Real Estate Investors
|Caliber Home Loans
Best for New Home-Buyers
|620||Not Specified||Not specified||3.5%||Yes|
Best for Customer Service
|Not specified||2.50%||30 years||3.5%||No|
How to Choose the Best FHA Lender
Choosing the best FHA lenders is a personal process, and there are a number of factors that should be considered before you decide on where to get your FHA loan. Here's what to look for:
- Qualification requirements: The first step in narrowing down the best FHA lenders is to make sure you meet their credit and income requirements. Although they might not publish it, all lenders will have a minimum credit score requirement and debt-to-income ratio requirements.
- Rates and fees: Shopping around for the best rates and lowest fees is how you save money on FHA loans. In addition to looking at interest rates, pay attention to lender fees like application fees, closing fees, origination fees, underwriting fees, and appraisal fees.
- Application process: Do you want to do everything online without having to speak to someone, or do you prefer working with a representative in person? Your answer will guide who you end up choosing for your FHA loan.
- Loan terms and amounts: You should know whether you want a 15-Year or 30-Year mortgage and roughly how big of a loan you need. That way, you can rule out any FHA lenders that don't offer what you're seeking.
FHA Loans vs. USDA Loans
Both FHA loans and USDA loans are backed by government agencies and allow borrowers, including those with lower credit scores than lenders typically require, to buy a home with a lower down payment and interest rate than they might normally qualify for. However, they're not the same—namely, USDA loans were created to stimulate housing markets in rural areas, so you can only use them to buy a home in qualified zones. The table below illustrates some key differences.
|Loan Type||FHA Loan||USDA Loan|
|Minimum Credit Score||580 (500 if making a 10% down payment)||640 in most cases|
|Debt-to-Income Ratio||Less than 43% (50% if you have good credit)||41% in most cases|
|Income Requirements||None||Cannot exceed 115% median income for your area|
|Minimum Down Payment||3.5%||0%|
|Loan Limits||$356,362 minimum, $822,375 maximum, varies by region||None|
|Other Requirements||Home must be primary residence for at least one year||Must buy in a qualified rural area|
Frequently Asked Questions
Are FHA Loans Hard to Get?
FHA loans are easier to get than conventional loans. They have lower credit score requirements and more flexible income requirements.
What Qualifications Do FHA Lenders Generally Require?
Most FHA lenders require you to have a credit score of at least 580 for a loan with a 3.5% down payment or 500 with a 10% down payment, although some lenders will require a score of 600 or 620. FHA lenders also look at your debt-to-income ratio or the portion of your gross income that goes toward your debt each month, and that should generally stay below 43%. You can sometimes qualify with a DTI of up to 50% if you have good credit.
What Is the Downside of Borrowing from an FHA Lender?
The main downside of FHA loans is that they require mortgage insurance. Even if you go with the best FHA lenders, this can mean a few extra thousand in closing costs and higher monthly payments. Also, you can only get FHA loans for a primary residence, so using them to purchase an investment property is tricky. You must live in the property for at least the first 12 months.
We considered over a dozen different mortgage lenders offering FHA loans before narrowing down this list to the best FHA lenders. In doing so, we reviewed customer service, rates and fees, the application process, credit requirements, and variety of loan types offered.
Once we nailed down our picks for the best FHA lenders, we honed in on their terms, requirements, and mortgage process to find lenders that specialize in everything from first-time homebuyers to investors to borrowers with bad credit. Transparency was also important, so lenders that published clear rates and terms were preferenced.