FHA Loans
An FHA loan is a mortgage insured by the Federal Housing Administration. That insurance lets approved lenders offer a down payment as low as 3.5% and more flexible credit and income standards than many conventional loans. This chapter shows how FHA works for California buyers and where to go next.
Key Takeaways
- FHA allows 3.5% down with a 580+ credit score, or 10% down with a score of 500 to 579.
- You pay an upfront mortgage insurance premium of 1.75% (it can be financed) plus an annual premium billed monthly.
- FHA is for primary residences with one to four units, and county loan limits apply.
- FHA is not always the cheapest choice. Your credit score and down payment decide whether FHA or conventional costs less.
What is in this chapter?
Start with the guide that matches your question. Each one has its own angle, so you will not read the same thing twice.
- How an FHA loan works: who insures it, who lends it, the step-by-step process and the key numbers.
- The benefits of an FHA loan: where FHA helps California buyers most.
- The cons of an FHA loan: the costs and limits you should weigh before you commit.
- FHA loan requirements: credit, debt-to-income, down payment, income documents, property and occupancy rules.
- FHA mortgage insurance explained: upfront and annual premiums, how long they last and how to remove them.
- FHA vs. conventional: which costs less?: a side-by-side comparison with California examples.
Who is FHA a good fit for?
FHA often works well for buyers who have limited savings, a credit score in the 500s or 600s, or monthly debts that are high compared with income. It also works for repeat buyers, not just first-timers, as long as the home will be your primary residence. If you have strong credit and 5% or more to put down, conventional financing may cost less, so it is worth comparing both.
What are the main FHA numbers?
| Item | FHA guideline |
|---|---|
| Minimum down payment | 3.5% with a 580+ score; 10% with a 500 to 579 score |
| Upfront mortgage insurance premium | 1.75% of the base loan, can be financed |
| Annual mortgage insurance premium | Roughly 0.50% to 0.75% of the loan per year on typical 30-year loans |
| How long annual premium lasts | Life of the loan if you put down less than 10%; 11 years if you put down 10% or more |
| 2026 one-unit loan limit in California | $541,287 to $1,249,125, depending on the county |
| Seller help with closing costs | Up to 6% |
| Property types | One to four units, primary residence only |
Where do I look up my county limit?
FHA limits are set county by county. High-cost counties, including Orange County and much of the Los Angeles and San Francisco Bay Area, sit at or near the ceiling. See the 2026 California FHA loan limits or use our loan limit lookup to find your county.
Where can I go deeper on FHA?
Our FHA program section has a full question-and-answer library. Good places to start are What Is an FHA Loan?, FHA credit score requirements, FHA loans for multi-unit properties and the main FHA Loans page. If you are weighing other options, read about conventional loans and whether a conventional loan is right for you.
At Lendia, we compare FHA with your other options
At Lendia, we compare options from multiple lenders to fit your situation, and we show your FHA payment next to conventional and VA choices. If another loan costs less, we tell you. Contact us to talk with a Licensed Lendia California Loan Officer, or get a rate quote now. Rates and terms depend on your situation; approval requires qualification.
Frequently Asked Questions
Is FHA only for first-time buyers?
No. Repeat buyers can use FHA too. The home must be your primary residence and meet FHA property standards.
Can I use FHA on a duplex or fourplex in California?
Yes, for one to four units if you live in one of them. Multi-unit limits are higher than the one-unit limits, so check the lookup for your county.
Can I cancel FHA mortgage insurance?
Not by simply asking. Premium length depends on your down payment: life of the loan under 10% down, 11 years at 10% or more. Many borrowers refinance into a conventional loan once they have 20% or more equity. See FHA mortgage insurance explained.
Can the seller pay my closing costs on an FHA loan?
Yes, FHA allows seller concessions up to 6% of the price. See FHA seller concessions.
Is an FHA loan assumable?
Yes, with lender approval. A future buyer may be able to take over your loan, which can matter when rates are high.
Talk to a Licensed Lendia California Loan Officer
At Lendia, we review your situation and show you the programs you qualify for.