As little as 3.5% down
Qualified buyers can put down just 3.5% of the purchase price, a fraction of the old 20% myth.
FHA Loans in Arizona
Low down payment, flexible credit, a first-time buyer favorite. Here's how FHA works, who it fits, and what to expect.
The Basics
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development (HUD). The government doesn't lend you the money, a lender does, but because the loan is government-insured, lenders can offer lower down payments and more flexible credit guidelines than many conventional programs.
That combination is why FHA is one of the most popular paths to homeownership in Arizona, especially for first-time buyers. As an independent mortgage broker, Howard Funding shops FHA pricing across many wholesale lenders to find you a strong rate and fair costs, not just one bank's offer.
Why Buyers Choose FHA
Key FHA benefits
FHA is built to make buying more attainable. Here's what stands out.
Flexible credit
FHA guidelines are more forgiving on credit history, making it a fit for buyers still building or rebuilding their score.
Gift funds allowed
Your entire down payment can come from a gift from a family member, a huge help for first-time buyers.
Assumable loans
FHA loans are assumable, meaning a future qualified buyer may be able to take over your loan and its rate, a potential selling advantage down the road.
Higher DTI flexibility
FHA can allow a higher debt-to-income ratio than many conventional loans, opening the door for more buyers to qualify.
Seller-paid costs
Sellers are allowed to contribute toward your closing costs, which can further reduce what you bring to the table.
Is FHA Right for You?
Who FHA is great for
First-time buyers
If you're buying your first home and want a low down payment with approachable requirements, FHA is often the natural starting point.
Buyers with lower credit
Still building credit or recovering from a rough patch? FHA's flexible guidelines give more buyers a realistic path to yes.
Buyers with higher DTI
Carrying student loans, a car payment, or other debt? FHA's more generous debt-to-income allowances can make the numbers work.
Explained Plainly
FHA basics, in plain English
Mortgage insurance (MIP)
Because FHA lets you buy with a small down payment, the loan comes with a mortgage insurance premium, or MIP. Think of it as the cost of the government insuring your loan. There are two pieces: an upfront premium that is usually rolled into your loan amount, and an annual premium that is split into 12 parts and added to your monthly payment. MIP is what makes the low down payment and flexible credit possible, and we'll show you exactly how it affects your monthly number before you commit to anything.
Loan limits vary by county
FHA sets a maximum loan amount, and that limit is county-specific, it's higher in more expensive areas and lower in others. Because the figures are updated periodically and differ across Arizona, we'll confirm the current limit for the county you're buying in rather than quote a single number here.
Property and occupancy
FHA loans are for primary residences you'll live in, not investment properties. The home also needs to meet basic FHA property standards, which the appraisal helps confirm. We'll guide you through what that means for the home you're considering.
Specific figures like loan limits and mortgage insurance amounts change over time and vary by county, loan size, and borrower. We'll walk you through the numbers that apply to your exact situation.
Quick Comparison
FHA vs. conventional at a glance
Two great options with different strengths. The right fit depends on your credit, down payment, and goals, and we'll help you compare real numbers.
| Feature | FHA loan | Conventional loan |
|---|---|---|
| Minimum down payment | As little as 3.5% | As little as 3% |
| Credit flexibility | More flexible guidelines | Typically needs stronger credit |
| Mortgage insurance | MIP (upfront + monthly) | PMI, and it can be removed with enough equity |
| Debt-to-income allowance | Often more generous | Generally tighter |
| Gift funds | Full down payment can be gifted | Allowed, with some conditions |
| Assumable | Yes | Usually no |
| Best for | Lower credit or down payment | Stronger credit, dropping mortgage insurance later |
How It Works
Your FHA loan, step by step
No jargon, no runaround. Here's how an FHA purchase moves from first call to keys in hand.
Get pre-approved
A quick application and a look at your finances confirms your FHA budget and hands you a pre-approval letter sellers respect.
We shop your loan
Howard Funding compares FHA pricing across many wholesale lenders to bring back the best rate and fees for your file.
Appraisal & underwriting
We order the FHA appraisal, gather your documents, and manage underwriting to keep your closing on schedule.
Close & get the keys
You sign, the loan funds, and the home is yours. We stay in touch to watch for future savings.
Common Questions
FHA loan FAQs
What credit score do I need for an FHA loan?
FHA guidelines are more flexible than many conventional programs, and lenders set their own minimums on top of them. Many buyers qualify with a mid-range score, and there may be options for lower scores with a larger down payment. The best way to know is a quick, no-obligation review of your situation.
How much is the down payment on an FHA loan?
FHA loans allow as little as 3.5% down for qualified buyers. That down payment can also come from a gift from family. We can also look at down-payment assistance to reduce your out-of-pocket cost further. Explore low- and no-down options.
What is FHA mortgage insurance (MIP)?
FHA loans include a mortgage insurance premium, or MIP. There's an upfront premium that's usually financed into the loan, plus an annual premium paid monthly. MIP is what allows FHA to offer low down payments and flexible credit, and we'll show you exactly how it affects your payment before you commit.
Can I buy a condo with an FHA loan?
Yes, but the condo project generally needs to be FHA-approved or eligible under single-unit approval. We can help you check whether a specific condo qualifies before you write an offer.
Can I refinance my FHA loan later?
Yes. If you already have an FHA loan, the FHA Streamline Refinance can lower your rate or payment with reduced documentation. You can also refinance from FHA into a conventional loan later to remove mortgage insurance once you have enough equity. Learn about refinancing.
This is not a commitment to lend. Rates and terms are subject to change and vary by borrower qualification and property. FHA loan requirements, mortgage insurance, and county loan limits are set by HUD/FHA and are subject to change. Equal Housing Lender.
Ready when you are
See if FHA is your best move.
Get a no-obligation pre-approval or just ask a question. Chance will give you a straight answer, fast.