FHA Loan Calculator

What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a government agency within the U.S. Department of Housing and Urban Development (HUD). FHA loans are designed to help first-time homebuyers and those with lower credit scores or smaller down payments achieve homeownership.

Key Features of FHA Loans

Lower Down Payment

• Minimum 3.5% down payment with a credit score of 580 or higher
• 10% down payment required for credit scores between 500-579
• Down payment can come from gifts, grants, or employer assistance programs

Mortgage Insurance Premium (MIP)

FHA loans require two types of mortgage insurance:

1. Upfront MIP (UFMIP): 1.75% of the base loan amount, typically financed into the loan
2. Annual MIP: 0.15% to 0.75% of the loan amount, depending on loan term and LTV ratio

Current Annual MIP Rates (2024)

How to Use This Calculator

1. Enter Home Price: The total purchase price of the home
2. Enter Down Payment: Minimum 3.5% for FHA loans (580+ credit score)
3. Select Loan Term: Choose between 15 or 30 years
4. Enter Interest Rate: The annual interest rate from your lender
5. Review MIP Options: Calculator automatically applies current FHA MIP rates

Understanding Your Results

Monthly Payment Breakdown

• Principal & Interest: The base mortgage payment
• Monthly MIP: Annual mortgage insurance divided by 12
• Total Monthly: Complete payment including MIP

Upfront Costs

• Upfront MIP: 1.75% of the loan amount (can be financed)
• Down Payment: Your cash contribution at closing

FHA Loan Formula

Monthly Payment Formula (Principal & Interest): M = P × [r(1+r)^n] / [(1+r)^n – 1]

Where:

• M = Monthly payment
• P = Principal (base loan amount + financed UFMIP if applicable)
• r = Monthly interest rate (annual rate ÷ 12)
• n = Total number of payments (years × 12)

Upfront MIP: Base Loan Amount × 1.75%

Source: Federal Housing Administration, HUD.gov

FHA Loan Limits (2024)

FHA loan limits vary by county and are based on local median home prices:

• Floor: $472,030 (low-cost areas)
• Ceiling: $1,089,300 (high-cost areas)
• Check your local FHA loan limit at HUD.gov

FHA vs Conventional Loans

*MIP can be removed after 11 years if you made 10%+ down payment and have paid for at least 11 years.

Frequently Asked Questions

Who qualifies for an FHA loan?

FHA loans are available to anyone who:

• Has a credit score of 500+ (580+ for 3.5% down)
• Can make at least 3.5% down payment
• Will use the home as their primary residence
• Has a valid Social Security number
• Is of legal age to sign a mortgage

Can I remove FHA mortgage insurance?

For loans with less than 10% down, MIP lasts the life of the loan. For 10%+ down payments on terms over 15 years, MIP can be removed after 11 years. Alternatively, you can refinance to a conventional loan once you have 20% equity.

Are there property requirements?

Yes, FHA requires the home to meet minimum property standards. An FHA appraisal will verify the home is safe, secure, and structurally sound.

Can I use an FHA loan for investment property?

No, FHA loans are only for primary residences. However, you can buy a multi-unit property (up to 4 units) if you live in one unit.

Disclaimer: This calculator provides estimates for educational purposes only. Actual rates, MIP amounts, and loan terms may vary. Consult with a qualified FHA-approved lender for specific advice.