FHA Loans

Government-backed financing with low down payments and flexible credit requirements

What Is an FHA Loan?

FHA loans are mortgages insured by the Federal Housing Administration. Because the government backs the lender against default, lenders can offer lower down payment requirements and more flexible qualification standards — making homeownership accessible to more Utah buyers.

3.5% Down Payment

As low as 3.5% down with a 580+ credit score — one of the lowest available

Flexible Credit Standards

Scores as low as 500 accepted (with 10% down); ideal for buyers rebuilding credit

Gift Funds Allowed

100% of the down payment can come from family gifts — no seasoning required

Higher DTI Tolerance

Debt-to-income up to 57% with compensating factors vs 43–45% for conventional

FHA Loan Requirements

Credit Score

• 580+ → 3.5% minimum down payment
• 500–579 → 10% minimum down payment
• Below 500 → not eligible for FHA

Mortgage Insurance Premium (MIP)

• Upfront MIP: 1.75% of loan amount (can be financed)
• Annual MIP: 0.55–1.05% depending on term and LTV
• MIP stays for life of loan if down payment < 10%

Loan Limits (2024, Utah)

• Salt Lake, Utah, Davis counties: $524,225 (1-unit)
• Summit County (Park City area): $1,149,825 (high-cost)
• Verify current limits at HUD.gov

Property Requirements

• Must be primary residence
• FHA appraisal required (stricter than conventional)
• Property must meet HUD minimum property standards

FHA vs. Conventional: When FHA Wins

FHA Advantages

• Lower credit score threshold
• Higher DTI tolerance
• Pairs well with Utah DPA programs
• Gift funds for full down payment

Conventional Advantages

• No upfront MIP
• PMI removable at 80% LTV
• Higher loan limits
• Faster FHA appraisal turnaround without overlays

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