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Best FHA Lenders of 2024

Review Updated
Steven Porrello
Author: Steven Porrello
Steven Porrello
Steven Porrello
Writer

Steven is a personal finance writer covering topics from mortgages to credit cards to market news. He has written for The Motley Fool Canada, Ramsey Solutions, Nerdwallet, Clever Real Estate, and other major outlets. Steven launched his writing career at the age of four with his first book, "Revenge of the Bad Guys." He currently lives in Portland, Oregon.

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Kimberly Rotter, AFC®
Reviewer: Kimberly Rotter, AFC®
Kimberly Rotter, AFC®
Kimberly Rotter, AFC®
Accredited Financial Counselor®

Kimberly is a career writer and editor with more than 30 years' experience. She's a bankruptcy survivor, small business owner, and homeschool parent. In addition to writing for The Motley Fool, she offers content strategy to financial technology startups, owns and manages a 350-writer content agency, and offers pro-bono financial counseling.

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Nathan Alderman
Fact Checked: Nathan Alderman
Nathan Alderman
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The Federal Housing Administration (FHA) has a mortgage program that could help you qualify for a home loan even if your credit history isn't flawless or you don't have a large down payment.

We've done the heavy lifting to make it easier for you to learn how FHA mortgages work, what steps to take to secure an FHA mortgage, and which lenders stand out as the best FHA lenders.

Our 7 best FHA lenders

Lender Best For Next Steps
Graphic of Rocket Mortgage®
Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Best For

Online application process
Read Review
Graphic of Citi Mortgage
Rating image, 4.5 out of 5 stars.
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Rating image, 4.5 out of 5 stars.
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Best For

Customer discounts
Read Review
Graphic of Bank of America Mortgage
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Best For

Home buyer grants
Read Review
Graphic of PNC Mortgage
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Best For

Low down payment with no PMI
Read Review
Graphic of Chase Mortgage
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Rating image, 4.5 out of 5 stars.
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Best For

Diverse loan terms and products
Read Review
Graphic of Pennymac
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Best For

Low rate guarantee
Read Review
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Rating image, 4.5 out of 5 stars.
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Best For

Diverse options and home buyers building credit
Read Review
Mortgage rates as of December 19, 2024

According to Mortgage News Daily, rates for 30-year fixed-rate mortgages are currently:

  • 0.05% higher than last month
  • 0.48% higher than last year

Rates vary from lender to lender. Check your rates at our top-rated lenders below.

Reviews of the best FHA lenders

We love these lenders for the benefits and features they offer to FHA borrowers:

For online application process: Rocket Mortgage®

Ratings Methodology
Rocket Mortgage®
Read Review

Best for: Online application process

Rocket Mortgage®

Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Bottom Line

Rocket Mortgage led the transition to a full digital experience and online-only applications. Its seamless process is one reason Rocket Mortgage is consistently ranked in the top two on J.D. Power's customer service rankings. Rocket Mortgage has a robust and high-quality app that makes it easy to use.

Read Full Review

Min. Credit Score 580 FHA 620 other mortgage products 680 Jumbo

  • 580 - 680

Min. Down Payment 0%-3.5% (FHA & VA loans) 3% (conventional loans)

  • 0% - 3%

Key Features

  • Online-only
  • Low down payment options
  • Opportunities to get cash toward closing
  • High customer satisfaction ratings

Loan Types

  • Conventional
  • FHA
  • VA
  • Jumbo

Fixed Rate Terms

  • 8 - 30 years (Customizable)

Adjustable Rate Terms

  • 10/6, 7/6, 5/6

Pros

  • Top-rated customer satisfaction
  • High quality app
  • Services most of its loans

Cons

  • No physical branches

Why is Rocket Mortgage® one of our best FHA lenders? Rocket Mortgage® offers competitive rates, great customer service, and a mortgage process that is entirely online, up to closing. It ranks No. 1 in J.D. Power's 2023 mortgage servicing customer satisfaction survey, and No. 2 in its 2023 mortgage origination customer satisfaction survey.

Borrowers can start the mortgage application, upload documents, and manage their payments all from Rocket Mortgage®'s highly rated home-buying app.

Fees and Closing Costs:

  • Application fees: $0
  • Closing costs: 3%-6%of the loan amount
Read our full Rocket Mortgage® review

For customer discounts: Citi Mortgage

Ratings Methodology
Citi Mortgage
Read Review

Best for: Customer discounts

Citi Mortgage

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Bottom Line

The diverse set of loan products and terms and relationship discounts make it a top pick, particularly for first-time home buyers and people interested in FHA loans. The high customer satisfaction ratings are the cherry on top.

Read Full Review

Min. Credit Score 580 FHA 620 other mortgage products

  • Undisclosed

Min. Down Payment

  • 0% - 3%

Key Features

  • No-PMI mortgage
  • High customer satisfaction
  • Available in all 50 states

Loan Types

  • Conventional
  • FHA
  • VA
  • Jumbo

Fixed Rate Terms

  • 10y, 15y, 20y, 30y

Adjustable Rate Terms

  • 10/6, 7/6, 5/6, 3/6

Pros

  • Pre-approval with a commitment to lend
  • Rate discount for current customers
  • Great reputation

Cons

  • No rate or fee transparency
  • Low Better Business Bureau rating

Why is Citi Mortgage one of our best FHA lenders? Citi offers eligible borrowers a lender credit of up to $7,500 to be applied toward closing costs, has high customer satisfaction ratings, and a free pre-approval process. Existing Citi customers are eligible for an interest rate reduction. The discount applies for the life of the loan.

Fees and Closing Costs:

  • Application fees: $175 in some states
  • Closing costs: 1%-4% of the loan amount
Read our full Citi Mortgage review

For home buyer grants: Bank of America Mortgage

Ratings Methodology
Bank of America Mortgage
Read Review

Best for: Home buyer grants

Bank of America Mortgage

Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Bottom Line

Bank of America is one of the largest banks in the U.S., offering a wide variety of financial products in addition to its mortgages. Few lenders can match the lineup of loan products and terms. Bank of America offers a Preferred Rewards program for borrowers who have bank accounts at the bank and investment accounts at Merrill. Borrowers can qualify for an origination fee or interest rate reduction based on their eligible tier at the time of application.

Read Full Review

Min. Credit Score

  • Undisclosed

Min. Down Payment 0% VA loans 3.5% FHA 3% Conventional loans, Affordable Loan Solution® mortgage, Freddie Mac Home Possible® mortgage 5% Other loans

  • 0%-3%

Key Features

  • Wide range of financial products
  • Preferred Rewards program
  • Ability to apply entirely online
  • Loans up to $2 million

Loan Types

  • Conventional
  • FHA
  • VA
  • Jumbo

Fixed Rate Terms

  • 30y, 20y, 15y

Adjustable Rate Terms

  • 10/6, 7/6, 5/6

Pros

  • Down payment assistance
  • Transparent mortgage rates

Cons

  • Lacking in non-qualified mortgage options

Why is Bank of America Mortgage one of our best FHA lenders? Bank of America Mortgage offers down payment and closing assistance. Qualified applicants can get cash grants of up to $17,500, and there are no restrictions on combining assistance programs.

The Bank of America Down Payment Center is an online educational resource where borrowers can search for local down payment and closing cost assistance programs.

Fees and Closing Costs:

  • Application fees: $562-$1,062 for most borrowers
  • Closing costs: 3%-5% of the loan amount
Read our full Bank of America Mortgage review

For low down payment with no PMI: PNC Mortgage

Ratings Methodology
PNC Mortgage
Read Review

Best for: Low down payment with no PMI

PNC Mortgage

Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Bottom Line

PNC is a large bank with a wide range of financial products. It offers an online tool called Home Insight Planner to help borrowers find a home that fits their budget and needs. It then matches a borrower to its diverse loan products and terms. PNC can accommodate many borrowers, including those looking for mortgage options with no PMI.

Read Full Review

Min. Credit Score

  • 600

Min. Down Payment 0% VA and USDA 3% conventional 3.5% FHA

  • 0% - 3.5%

Key Features

  • 3% down no PMI offering
  • HELOCs
  • Cash grants
  • Several low down payment mortgage options

Loan Types

  • Conventional
  • FHA
  • VA
  • USDA
  • Jumbo

Fixed Rate Terms

  • 10-30 years

Adjustable Rate Terms

  • 10/6, 7/6

Pros

  • Wide selection
  • Cash grants
  • Digital pre-approval

Cons

  • Elusive relationship discount
  • Fee transparency

Why is PNC Mortgage one of our best FHA lenders? PNC Mortgage offers competitive rates and terms for FHA borrowers. We like that PNC offers digital pre-approval for all borrowers. Borrowers who meet PNC's eligibility requirements can apply for cash grants and take advantage of low down payment options (including a low down payment mortgage with no PMI).

Fees and Closing Costs:

  • Application fees: $0
  • Closing costs: 2%-6% of the loan amount
Read our full PNC Mortgage review

For diverse loan terms and products: Chase Mortgage

Ratings Methodology
Chase Mortgage
Read Review

Best for: Diverse loan terms and products

Chase Mortgage

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor

Bottom Line

The wide array of loan types and low- to no-down-payment options makes it a compelling lender to consider for a purchase or refi.

Read Full Review

Min. Credit Score 620

  • 580 - 620

Min. Down Payment 0% VA and FHA loans 3% Dreamaker loans 3.5% FHA 5% Conforming

  • 0% - 3.5%

Key Features

  • Low down payment loan option
  • Up to $7,500 home buyer grant
  • Transparent mortgage rates
  • High marks for customer service

Loan Types

  • Conventional
  • FHA
  • VA
  • Jumbo
  • Interest Only

Fixed Rate Terms

  • 15y, 30y

Adjustable Rate Terms

  • 10/6, 7/6, 5/6

Pros

  • Home buyer grants
  • Published mortgage rates

Cons

  • No published fees
  • No home equity loan

Why is Chase Mortgage one of our best FHA lenders? Chase is transparent about its mortgage rates and offers grants to help make buying a home more affordable. FHA borrowers who are purchasing a primary home in an eligible census tract may qualify for a $2,500, $5,000, or $7,500 grant from Chase. The grant can be used to pay for points, fees, and the down payment.

The wide array of loan types and low- to no-down-payment options makes Chase Mortgage a compelling lender to consider.

Fees and Closing Costs:

  • Application fees: Varies
  • Closing costs: 2%-6% of the loan amount
Read our full Chase Mortgage review

For low rate guarantee: Pennymac

Ratings Methodology
Pennymac
Read Review

Best for: Low rate guarantee

Pennymac

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
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Bottom Line

Pennymac specializes in government mortgages like VA and FHA loans. Pennymac offers rate transparency, help via phone or online, flexible loan terms, and a rate guaranteed to beat competitors. Pennymac is a great place for people to start looking for a mortgage.

Read Full Review

Min. Credit Score 580 FHA and VA loans 620 Conventional loan 700 Jumbo loan

  • 580-620

Min. Down Payment

  • 0% - 3%

Key Features

  • 100% online application
  • Instant rate estimates
  • Flexible terms
  • Top VA lender
  • Money-saving perks

Loan Types

  • Conventional
  • FHA
  • VA
  • USDA
  • Jumbo

Fixed Rate Terms

  • Customizable between 15y and 30y

Adjustable Rate Terms

  • 10/6, 7/6, 5/6

Pros

  • Rate transparency
  • Up to 90-day rate lock
  • Flexible terms

Cons

  • Limited physical presence

Why is Pennymac one of our best FHA lenders? Pennymac specializes in government-backed mortgages like FHA loans. Pennymac offers rate transparency, help via phone or online, flexible loan terms, and a rate guaranteed to beat competitors.

We like that Pennymac publishes its mortgage interest rates online and that borrowers can get customized mortgage terms. Pennymac also offers a fully online loan application process, which is a plus for borrowers who want a streamlined digital experience.

Fees and Closing Costs:

  • Application fees: $0
  • Closing costs: 2%-5% of the loan amount
Read our full Pennymac review

For diverse options and home buyers building credit: New American Funding

Ratings Methodology
New American Funding
Read Review

Best for: Diverse options and home buyers building credit

New American Funding

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor

Bottom Line

New American Funding is one of the largest privately owned direct mortgage lenders in the country. The lender offers competitive rates. Its selection of loans and customizable loan terms is broader than many other lenders'. The lender also has a highly efficient lending process that allows for quicker closing times. What's more, New American can be a good solution for people building credit and wanting a good mortgage. It focuses on lending to underserved communities.

Read Full Review

Min. Credit Score 500 FHA 620 other mortgage products

  • 500 - 620

Min. Down Payment 0% VA 3% Conventional 3.5% FHA

  • 0% - 3.5%

Key Features

  • Fast service
  • One of the top lenders to Hispanic and Black borrowers.
  • Offer customizable loans, including home addition loans
  • High customer satisfaction, A BBB rating

Loan Types

  • Conventional
  • FHA
  • VA
  • USDA
  • Jumbo
  • Interest Only

Fixed Rate Terms

  • Customizable (8 - 40 years)

Adjustable Rate Terms

  • 10/1 and 10/6, 7/1 and 7/6, 5/1 and 5/6

Pros

  • Resources for first-time home buyers
  • Spanish-speaking

Cons

  • Application is not fully digital
  • Must submit your email address to get a rate

Why is New American Funding one of our best FHA lenders? We like how easy it is to find information about New American Funding's loans and mortgage rates on its website.

New American Funding is Hispanic-owned, offers bilingual customer service, and is committed to providing mortgage education for underserved communities. The lender has a good reputation for customer service, with customers praising its quick closing times and hassle-free mortgage process.

Fees and Closing Costs:

  • Application fees: $0
  • Closing costs: 2%-6% of the loan amount
Read our full New American Funding review

How to pick the right FHA lender

Here are six steps to help you choose the best FHA lender.

Step 1. Find out your credit score

To get an FHA loan, you will need a credit score of at least 580 (some lenders allow a lower credit score if you can make a larger down payment). If yours isn't high enough (or you don't have a credit score), you can work on increasing your credit score before starting the loan application process.

Step 2. Determine your loan amount

Before selecting an FHA lender, get an idea of how much you can borrow. Lenders often want your housing payment to be no more than 28% of your monthly gross (before taxes) income. Your housing payment includes the mortgage principal and interest payment, your homeowners insurance, property taxes, and any homeowners association dues you have to pay.

Keep in mind that just because a lender says you can afford a certain payment, it's up to you to decide whether your budget can comfortably handle it. Even if you're approved for a bigger payment, you don't have to commit to it.

Now, use an online mortgage calculator to figure out how much you can borrow and end up with a payment in the range that works for your income. The amount you can borrow will depend on mortgage interest rates and how much property taxes, insurance, and HOA fees cost where you want to buy.

Step 3. Ask about rates

Each FHA mortgage company sets its own FHA mortgage rates. Even a small difference in interest rate could result in big savings.

Step 4. Choose a lender offering your desired terms

Do you want a 15- or 30-year mortgage? Make sure the FHA lender you're interested in offers the term you're looking for.

Step 5. Look for lenders with lower closing costs

When you sign a mortgage, you pay closing costs to finalize that loan. It's common for closing costs to amount to 2% to 6% of your loan amount -- try to find a lender with lower closing costs to save money.

Step 6. Get prequalified or pre-approved

Getting prequalified or pre-approved for a mortgage with a few lenders could help you get custom estimates. Prequalification will give you a ballpark rate based on your finances, and won't affect your credit score; applying for pre-approval could lower your credit score slightly, but you'll get a more precise rate quote.

It's worth your time to get pre-approved for a mortgage by at least two or three lenders, especially if it's free to apply.

Each lender should give you a loan estimate, which is a form that shows all the details of the loan you're being offered. This form lets you easily compare offers. You can minimize the effect on your credit score by making your applications within a two-week period.

Is an FHA loan right for me?

An FHA loan could be a smart choice if you have a lower credit score and a smaller down payment. Use our list above as a starting point to find the best FHA lenders for bad credit.

If your credit score is higher or you have a relatively large down payment, you'll probably save money with a conventional mortgage.

For example:

  • If your down payment is 20% of the purchase price on a conventional loan, you can avoid paying mortgage insurance altogether. For most FHA borrowers, however, mortgage insurance lasts for the life of the loan.
  • Even if you don't have a large down payment, borrowers with excellent credit scores might still qualify for a better rate on a conventional mortgage with a down payment as low as 3%.

If that's your situation, get started with our list of this month's best mortgage lenders.

Do all lenders work with FHA loans?

For lenders to offer FHA loans, they must be approved by the Federal Housing Administration, which backs those loans. Many banks and lending institutions offer FHA loans, but there are some lenders that are not approved to offer them.

What are the requirements for an FHA loan?

An FHA mortgage is a private home loan insured by the government. Because the loan amount is insured by the FHA, lenders are more willing to take on high-risk borrowers. That said, an FHA loan does have some requirements, such as:

  • Down payment of at least 3.5%
  • Credit score of at least 580 (can be as low as 500 if your down payment is 10% or more)
  • Debt-to-income ratio of at most 43%
  • Loan must be for an owner-occupied property
  • Two years of stable income and explanations for any gaps in employment history
  • Safe, sound, and secure property

Are there extra costs with an FHA loan?

Yes, FHA loans come with costs above what you'll pay on the mortgage. Perhaps the most significant is the FHA mortgage insurance premium (MIP), which is broken down into two types: upfront and annual.

The upfront MIP is 1.75% of the loan amount. For example, if you buy a $300,000 home and put 3.5% down, your base loan amount is $289,500. The upfront MIP on this loan amount would be 1.75% of $289,500, or $5,066.25. This amount is paid only once and can be rolled into your FHA loan.

The annual MIP is a bit more complicated to calculate. It depends on the loan length, amount, and down payment.

  • For most 15-year FHA loans, it ranges from 0.15% to 0.65% per year.
  • For 30-year FHA loans, it's in the 0.50% to 0.75% range.

Let's say you took the $289,500 loan mentioned above, and a 30-year loan term at 7%. Here's how your annual MIP may look over time:

Year Mortgage balance at end of year Annual MIP Amount added to next year's monthly payments
1 $286,559 $1,576 $131
2 $283,406 $1,559 $130
3 $280,025 $1,540 $128
Data source: Calculations by author.

If your down payment was less than 10%, you'll pay annual MIPs for the entire length of your FHA loan.

For FHA borrowers who can put down 10% or more, annual MIP can be dropped after 11 years for both 15- and 30-year loan terms.

Is there an income limit for FHA loans?

No, there is no minimum or maximum income to qualify for an FHA loan. But you do need enough income to show the lender that you can afford the housing payment.

Also, there are FHA loan limits -- that is, a maximum amount you can borrow. The limits are specific to the county where the property is located, and are higher for two- to four-unit properties. In 2024, the FHA loan limit for single family homes properties in most of the country was $498,257.

If you're curious about the FHA loan limit for a specific geographic location, the Department of Housing and Urban Development (HUD) has a quick and easy search tool you can use.

Pros and cons of FHA loans

FHA loans have their benefits and drawbacks so it's important to consider both.

Here's a closer look at a few pros and cons.

Pros:

  • Lower credit score requirements
  • Lower down payment requirements
  • Available to first-time home buyers and repeat buyers
  • Can buy a multi-unit property as long as you occupy one unit
  • No income limits

Cons:

  • Upfront and ongoing mortgage insurance premiums
  • Can't borrow for a vacation home or investment property
  • Loan amounts are capped

What is an FHA loan?

An FHA loan is a type of mortgage insured by the Federal Housing Administration. These mortgage loans have lower barriers to entry and can help you finance a home even if you don't have a high credit score or large down payment.

Because the requirements aren't as strict as conventional mortgages, these loans are perfect for first-time home buyers or those with poor credit.

FHA mortgages come in two different types:

  • FHA 203(b) loan: This is designed for buying a home that is move-in ready. It's the "standard" FHA loan.
  • FHA 203(k) loan: This is an FHA mortgage loan designed for purchasing homes that need significant repairs or renovations before move-in. Many of the best FHA 203(k) lenders will let you roll these costs into a monthly mortgage payment with a competitive interest rate.

One of the most important points to know about FHA loans is that they are meant only for owner-occupied properties. You can't use an FHA loan to buy a vacation home, rental, or investment property.

FAQs

  • An FHA loan is a type of mortgage loan that is designed for buyers who have poor credit scores, small down payments, or higher-than-average DTI ratios. FHA loans are made by private mortgage lenders, such as banks, credit unions, and specialized mortgage lenders, and are guaranteed by the Federal Housing Administration.

  • FHAs require two types of mortgage insurance premiums (MIP): annual and upfront. They don't, however, require private mortgage insurance (PMI).

  • Yes, the minimum FICO® Score required for an FHA loan is 580. For down payments above 10%, the minimum credit score is 500.

  • The best bank for FHA loans is one that offers you a competitive mortgage rate and will pre-approve you even if your credit score isn't flawless. Many national banks have FHA mortgage programs, but you can check out credit unions to compare rates.

  • No, they're not the same. An FHA lender is someone who will issue you an FHA loan, whereas an FHA mortgage broker is an intermediary who will connect you with FHA lenders or FHA mortgage companies. Brokers can help you find good FHA loan rates, but they won't lend you money themselves.