Friends & FamilyFinancial

FHA Loans

Government-backed mortgage financing designed to help more California families achieve homeownership — with lower down payments and flexible credit requirements.

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What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD). Because the government backs these loans, lenders can offer more flexible qualification requirements than conventional mortgages.

FHA loans are one of the most popular options for first-time homebuyers in California, as well as buyers who may have less-than-perfect credit or limited funds for a down payment. They can only be used to purchase or refinance a primary residence.

Key Features & Benefits

FHA loans offer several advantages that make homeownership more accessible.

Low Down Payment

Down payments as low as 3.5% for borrowers with a credit score of 580 or higher.

Flexible Credit Requirements

Credit scores as low as 580 may qualify. Borrowers with scores 500–579 may qualify with a 10% down payment.

Higher Debt-to-Income Ratios

FHA guidelines allow higher debt-to-income ratios than conventional loans, making it easier to qualify.

Gift Funds Allowed

The entire down payment and closing costs can come from gift funds from family members.

Streamline Refinance

Existing FHA borrowers may qualify for a streamlined refinance with reduced documentation requirements.

Assumable Loans

FHA loans can be assumed by a qualified buyer when you sell your home, which can be a valuable selling feature.

Typical Requirements

Credit & Income

  • Credit score of 580+ for 3.5% down payment
  • Credit score of 500–579 requires 10% down payment
  • Stable employment history (typically 2 years)
  • Debt-to-income ratio up to 50% may be acceptable

Property & Other

  • Property must be your primary residence
  • Property must meet FHA minimum standards
  • FHA appraisal required
  • Mortgage insurance premium (MIP) required for life of loan if less than 10% down

Is an FHA Loan Right for You?

An FHA loan may be the best fit if you:

  • Are a first-time homebuyer with limited savings for a down payment
  • Have a credit score between 500 and 679
  • Have had past credit challenges such as bankruptcy or foreclosure
  • Want to use gift funds from family for your down payment
  • Have a higher debt-to-income ratio that may not qualify for conventional financing
  • Are purchasing a primary residence in California

Not sure if an FHA loan is the right choice? Our loan officers will review your situation and help you compare all available options at no cost or obligation.

This is not a commitment to lend. All loans subject to credit approval, underwriting guidelines, and property appraisal. Rates, terms, and program availability are subject to change without notice. FHA loans are insured by the Federal Housing Administration. Friends & Family Financial | NMLS #1269265 | DRE #01968186 | Licensed by the California Department of Real Estate.

Ready to Get Started?

Contact us today for a free consultation. We'll help you determine if an FHA loan is the right fit for your home purchase.

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