FHA loans in New York

New York combines high-paying job markets and unmatched cultural access, but median home prices are higher than the national average. If your credit is less than perfect or your savings are tight, an FHA loan in New York state can help you qualify with as little as 3.5% down and flexible credit guidelines. Below, we cover 2025 FHA loan limits by county, eligibility, New York down payment assistance, and how Rocket Mortgage can help you get started.

What are FHA loans?

An FHA loan is a government-backed mortgage, meaning that if a borrower defaults on the loan, the Federal Housing Administration reimburses the lender for its losses.

This built-in safety net for lenders leads to more flexible lending requirements. Generally, FHA loans offer low down payment options and flexible credit requirements. These loans aren't just available in New York; they're available to home buyers around the country.

How do FHA loans work?

While many first-time home buyers turn to FHA loans, these loans are available to any borrower who meets the eligibility requirements. The property also must meet FHA standards.

If you have a credit score of 580 or higher, you may qualify with a minimum down payment of 3.5%. But if your credit score falls between 500 and 579, the minimum down payment requirement jumps to 10%.

Some property types that can be financed or refinanced through an FHA loan include:

• Single-family homes
• Condos
• Townhomes
• Properties with 2 – 4 units
• Manufactured homes on a permanent foundation

FHA loans require borrowers to pay mortgage insurance premiums. Buyers must pay an up-front MIP at closing of 1.75% of the loan amount. They also must pay an annual MIP, which is divided into monthly payments. The annual MIP must be paid for the entire term of the loan if the down payment is less than 10%. If the down payment was more than 10%, annual MIP payments end after 11 years.

Beyond the standard FHA loan, other FHA loan programs include:

• FHA Streamline refinance. This allows you to refinance your existing FHA loan into a new FHA mortgage with limited documentation.¹ Refinancing lets homeowners get a lower interest rate, reduce their monthly payment, or switch from an adjustable-rate loan to a fixed-rate loan.
• FHA 203(k). You can finance a home purchase and renovation costs through an FHA 203(k) loan. Rocket Mortgage currently doesn't offer FHA 203(k) loans.

While an FHA loan might help you buy a home, you might not want to stick with this loan type forever. If you decide to make a change down the line, you may have the option of refinancing through a conventional loan.²

How 2025 FHA loan limits work in New York

In 2026, New York FHA loan limits range from $541,287 to $1,249,125 for 1-unit homes, depending on the county.

The following table highlights the standard FHA mortgage loan limits by county in the Empire State.

FHA loan requirements

FHA loans are known for relatively flexible eligibility requirements. Each lender can set its own FHA loan requirements to some degree. But most prefer a debt-to-income (DTI) ratio of less than 43% and a home that passes the FHA appraisal and inspection.

For New York borrowers applying for an FHA loan with Rocket Mortgage, the following chart highlights the general requirements.

FHA loan down payment assistance programs in New York

Home buyers with limited funds for a down payment might be relieved to discover the plentiful down payment assistance programs in New York. Most lenders, including Rocket Mortgage, work with FHA loan borrowers who use down payment assistance.

Some of the most popular down payment assistance programs in New York are as follows.

SONYMA FHA Plus Program

The State of New York Mortgage Agency offers a variety of homeownership assistance programs, including down payment assistance. Through SONYMA’s FHA Plus program, eligible home buyers can receive funds to cover both the down payment, the up-front MIP payment, and closing costs.

Generally, you’ll need a credit score of at least 600 to apply.

HomeFirst Down Payment Assistance Program

For home buyers considering a purchase in the Big Apple, the NYC Housing Preservation & Development organization offers the HomeFirst Down Payment Assistance Program.

Qualified first-time home buyers can receive up to $100,000 in the form of a forgivable loan toward the down payment or closing costs of a 1- to 4-unit family home, condo, or co-op in one of the five boroughs of New York City.

To qualify, you’ll need a minimum credit score of 620 and earn no more than 120% of the area median income, which currently sits at $136,080 for a one-person household.

If you receive a loan for less than $40,000, you’ll need to live in the property for at least 10 years before the loan is forgiven. If you receive a loan for more than $40,000, the owner occupancy requirement expands to 15 years.

Pros and cons of buying a home in New York with an FHA loan

Buying a home in New York with an FHA loan can make sense for the right home buyer. But, as with all loans, there are some disadvantages to keep in mind. We’ll explore the pros and cons of FHA loans for New York buyers.

Pros

The flexible eligibility requirements of an FHA loan make homeownership possible for some buyers, especially those who struggle to qualify for conventional financing. Some key benefits of FHA loans for New York home buyers include:

• Higher FHA loan limits in high-cost areas. Counties like New York (Manhattan), Westchester, Nassau, and Suffolk have FHA loan limits well above the national baseline, making it easier to finance pricier homes compared to other states.
• Expanded condo approval in New York City. FHA offers a "single-unit approval" option that can benefit New Yorkers purchasing condos in buildings where the entire project isn't FHA-approved.
• Low down payment requirements. You may only have to put down 3.5% on a home purchase through the FHA loan.

Cons

Although FHA loans open the door to homeownership, there are some trade-offs to consider. These include:

• Co-op restrictions. Unlike condos, FHA loans aren’t available for co-ops, limiting options for buyers in cities dominated by co-op housing (especially New York City).
• High closing costs. New York has some of the highest closing costs in the country. These costs, such as transfer taxes, mortgage recording taxes, and attorney fees, can diminish the affordability advantage of FHA loans.
• Competitive market disadvantage. In New York City and other high-demand markets, sellers may view FHA financing less favorably than conventional loans due to stricter appraisal requirements, which can make offers less competitive.

FAQ

If you have further questions about using an FHA loan in New York, the following answers may provide additional assistance.

Do FHA loans have private mortgage insurance?

FHA loans do not require PMI, unlike conventional loans. Instead, they require mortgage insurance premiums. MIP includes an up-front fee of 1.75% and an annual premium paid monthly. MIP protects the lender in case of default.

What is considered a large deposit for an FHA loan?

A large FHA deposit generally refers to anything above the minimum 3.5% down payment, especially 10% or more.

What are today’s FHA mortgage rates?

Check today's FHA mortgage rates from Rocket Mortgage.

What is the FHA loan 75% rule?

The 75% rule for FHA loans refers to the FHA Self-Sufficiency Rule, which applies when buying a 3- or 4-unit property with an FHA loan. It requires that at least 75% of the projected rental income be enough to cover the full monthly mortgage payment.

The bottom line: Using an FHA loan to buy a home in New York

Before applying for an FHA loan in New York, weighing the pros and cons is a good idea. While FHA loans come with more generous lending requirements, the loan limits and ongoing MIP costs might be a dealbreaker for you.

If you are ready to move forward with an FHA loan, start the approval process today with Rocket Mortgage.

¹ The FHA Streamline program may have stricter requirements in some states. In order to qualify for the FHA Streamline program, an immediate .5% minimum reduction in interest and mortgage insurance premium is required. Some states may require an appraisal.

² Refinancing may increase finance charges over the life of the loan.

³ To qualify for this offer, you must meet all standard FHA eligibility requirements. In addition, your total mortgage payment, including taxes and insurance, cannot exceed 38% of your income, your debt-to-income (DTI) ratio cannot exceed 45%, and you must have 12 months of verifiable housing history immediately prior to your application, no late payments 30 days or greater in the last 12-months, and no derogatory marks on your credit report. Not available on jumbo loans. Asset statements may be needed, no more than 1 day of non-sufficient fund fees are allowed in the most recent 2 months prior to application. Additional restrictions/conditions may apply.