FHA Loan Calculator

What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency. Because the FHA guarantees the loan, lenders can offer more lenient qualification requirements — lower credit scores and smaller down payments — making homeownership accessible to more buyers.

Minimum Requirements

• Minimum down payment: 3.5% (with a credit score of 580 or higher)
• Minimum credit score: 500 (with 10% down if score is 500–579)
• Debt-to-income ratio: Up to 57% in some cases
• Loan limits (2024): Vary by county; typically $498,257 to $1,149,825

How Monthly Payments Are Calculated

Step 1: Calculate the loan amount Loan Amount = Home Price − Down Payment

Step 2: Add the Upfront MIP Upfront MIP = Loan Amount × 1.75% Financed Loan = Loan Amount + Upfront MIP

(The upfront MIP is usually rolled into the loan, not paid at closing.)

Step 3: Calculate Principal and Interest Standard amortization formula on the Financed Loan.

Step 4: Add Annual MIP (monthly) Annual MIP rates (2024) range from 0.50% to 0.75% depending on loan-to-value ratio and term. This is divided by 12 and added monthly.

Total Monthly Payment

Monthly Payment = P&I + Monthly MIP + Property Tax + Homeowner's Insurance

(This calculator covers P&I and MIP. Property tax and insurance vary by location.)

When Does MIP End?

• Down payment ≥ 10%: MIP cancels after 11 years
• Down payment < 10%: MIP lasts the entire loan term — this is a significant cost difference vs. conventional loans

FHA vs. Conventional

A conventional loan with 20% down has no PMI and a lower total cost over the loan life. However, if you cannot afford 20% down and need to get into a home, FHA’s lower credit score requirements and 3.5% down payment can be the difference between renting and owning.

Who Should Use an FHA Loan?

First-time homebuyers, those with less-than-perfect credit, or buyers with limited savings for a down payment. Once you have 20% equity, you can refinance into a conventional loan to eliminate MIP.