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FHA home loans are a type of mortgage that is backed by the Federal Housing Administration (FHA). In 1934, the FHA was created to help people buy houses that they otherwise wouldn’t have been able to afford. Because the federal government backs these loans, they have smaller down payments and less restrictive lending standards than conventional home loans.

These fixed-rate loans are a great option for first-time home buyers or borrowers who haven’t been able to save up enough for a down payment or have had credit issues in the past. FHA home loans may mean paying a little more in the long term because of higher interest rates and mortgage insurance, but it can be a very affordable way to buy a your dream home a little bit more quickly.

Just as there are different types of conventional home loans, there are multiple varieties of FHA home loans for different financial situations. FHA home loans have maximum loan amounts that vary by state and county.

Most Common Types of FHA Home Loans

203(b): The FHA 203(b) home loan is the most common type of FHA loan for homes being purchased and need under $5,000 in repairs. Funds are dispersed in a single loan amount. These loans are available for single-family homes on 1-4 unit properties.

203(k): The FHA 203(k) is also known as a rehabilitation (rehab) home loan. These loans are intended for homes that need significant repairs or remodels. FHA 203(k) is dispersed in stages and includes the amount needed to purchase the home. HUD homes needing repair may qualify for FHA 203(k) home loans.


Benefits of FHA Home Loans

  • Lower down payment than a conventional home loan of 3.5%.
  • Home loan financing of up to 96.57%.
  • Less restrictive lending standards and credit qualifications.
  • Insured by the federal goverment.
  • 100% of closing costs can be gifted from a relative, non-profit, or government agency.
  • Up to 6% of prepaid expenses, reserves, and closing costs can be paid by the seller.

Additional Resources FHA Loans


Qualifications, rates, and conditions can vary from state to state, so it’s important to have a local team on your side who is well-versed in local laws and regulations. Summit Mortgage Corporation is an FHA-approved lender with offices in Portland, Vancouver, and Spokane and licensed in Oregon, Washington, and California. We can help guide you through the checklist to see if you qualify for this program. Contact us today to find out if you qualify.

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