Step-by-step FHA loan process

The Federal Housing Administration helps aspiring homeowners afford to buy a home by helping lenders offer mortgages to buyers with less-than-perfect credit. However, the process of getting an FHA loan can feel overwhelming to new home buyers. Learning how FHA loans work and the steps you need to take to get one can help you navigate the process and successfully buy a home you can afford.

What is an FHA loan?

FHA loans are government-backed mortgages that help make homeownership more accessible. How? The FHA insures these loans, which reimburses lenders for their losses if the borrower defaults. That allows lenders to offer FHA-compliant loans to borrowers who may not qualify for a conventional loan.

FHA loan requirements

Let’s take a deeper dive into the specifics of FHA loan requirements.

FHA borrower requirements

Though more flexible, there are still specific requirements you’ll need to meet to qualify for an FHA loan. These are set by the FHA, but individual lenders can add their own requirements on top of them. But in general, you’ll need:

• A Social Security number and lawful U.S. residency.
• At least 2 years of steady employment or income history.
• A debt-to-income ratio of less than 43%, though some lenders allow a higher ratio.
• A credit score of at least 580 for a 3.5% down payment, which is what's required for an FHA loan through Rocket Mortgage^®. Other lenders may offer FHA loans to borrowers with a credit score of 500–579 and a 10% down payment.
• You need to pay closing costs, which typically total 3% – 6% of the purchase price. These include lender fees, title insurance, taxes, and more.
• Provide proof that the home will be your primary residence.

Maximum loan amounts

There is a limit with an FHA loan to the amount you can borrow. FHA loan limits are set each year and vary by home type and county. For 2025, FHA loan limits for a single-family home range from $524,225 to $1,209,750. You can look up the FHA mortgage limits in the county where you're looking to buy a home.

Mortgage insurance premiums

FHA borrowers must pay mortgage insurance premiums to fund the loan program. There are two types of MIP:

• Up-front MIP: This is a one-time premium paid at closing for your FHA loan. It equals 1.75% of your loan amount.
• Annual MIP: This is a yearly fee and is a percentage of your remaining loan balance. It's usually paid in monthly installments added to your mortgage payment. The annual MIP is based on your down payment, loan amount, and loan term, and ranges from 0.45% to 1.05%. You’ll need to pay MIP for the life of your loan if your down payment is less than 10%. If it’s 10% or more, you stop paying for MIP for 11 years.

Which homes qualify for an FHA loan?

FHA loans can be used to buy a home with as many as four units, as long as you live in one of the units. You also can buy FHA-approved condos, and some manufactured homes on permanent foundations.

Homes must meet FHA appraisal standards, which ensure they are safe and structurally sound. There are also special fixer-upper loans, such as the FHA 203(k) loan.

FHA loan process: Step-by-step

Now that you know the general requirements for an FHA loan, here are 7 steps to take to buy a home with one.

1. Find an FHA-approved lender

When you're ready to buy a home, you'll need to find an FHA-approved lender. A good place to begin is the U.S. Department of Housing and Urban Development’s lender search tool. You also can search online or ask your bank or credit union whether they offer FHA loans. Rocket Mortgage also offers FHA loans.

2. Get mortgage preapproval

When you're ready to shop for a home, consider getting mortgage preapproval. You'll submit your financial documents to the lender, which will provide a letter estimating how much it expects you can borrow. This gives you an idea of how much you can afford to spend on a home. It also can make you more competitive with sellers, since you can show you're ready to get a loan.

3. Submit your loan application and documentation

As with any loan type, FHA loans require a lot of paperwork. Every lender has its own way of doing things, but here’s what you can generally need to provide:

• Pay stubs, W-2 forms, or tax returns if you’re self-employed.
• Recent bank statements
• Government-issued photo ID and Social Security number.
• Proof of assets for your down payment and closing costs.

4. Compare Loan Estimates from multiple lenders

Within 3 business days of receiving your FHA loan application, your lender will provide a Loan Estimate. This document estimates the loan you're being offered, including how much you've been approved to borrow, the interest rate, APR, monthly payment, and projected closing costs. It’s important to review your Loan Estimate carefully. It's also a good idea to apply with multiple lenders and compare Loan Estimates to ensure you're getting the best loan terms.

5. Your lender orders an FHA appraisal and inspection

The lender you choose will order a mandatory FHA appraisal and inspection, which confirms the property’s market value and verifies that the property meets the FHA’s safety standards. Both standards must be met for the loan to be approved. The appraiser will check for working utilities, that the roof has no leaks, and that the home is safe to live in.

6. Processing and underwriting

After your appraisal, your loan application moves to underwriting, during which the lender verifies your finances, including your credit score, employment, and DTI ratio. Don’t be surprised if your lender asks for additional documentation.

7. Close on your FHA loan

Once the underwriter approves your loan, you move on to closing. At least 3 days before closing, you'll receive a Closing Disclosure from your lender detailing all the final terms of your loan, including closing costs. At closing, you'll sign a lot of documents, pay closing costs and any outstanding fees, and receive the keys to your new home.

FHA appraisal vs. inspection: what to expect

All FHA loans require an appraisal, which includes an inspection component.

FHA appraisal process

The FHA appraisal is both an appraisal and an inspection. The appraisal assesses the property’s value to ensure the home is worth enough to justify the loan.

FHA inspection requirements

The appraiser will also perform a health and safety review to make sure the property meets the FHA’s Minimum Property Requirements. The home’s major systems must be in working order, and the home must be safe to live in and free of hazards and odors.

As of June 2025, the FHA dropped its requirement for the appraiser to state the expected economic life of the home, so a standard home inspection that evaluates its overall condition may be a good idea. This will highlight any defects or problems with the house, so you know what you're buying.

Timeline: How long does the FHA loan process take?

In general, expect it to take 30 to 45 days to buy a home using an FHA loan. Here’s a breakdown of the timeline of a typical FHA loan home purchase. Keep in mind, some of these steps can overlap.

• Preapproval: 1 – 3 days
• Offer and acceptance: 1 – 7 days
• FHA appraisal: Up to 14 days
• Loan application and processing: Up to 30 days.
• Loan underwriting: 7 – 14 days.
• Title search and insurance: 7 – 14 days.
• Closing: 1 – 2 days.

FHA loans vs. conventional loans: Key differences

If you’re able to qualify for either an FHA loan or a conventional loan, you should understand the key differences. Here’s a breakdown:

Looking ahead: Refinancing options

When your financial situation changes, it may make sense to refinance your mortgage to reduce your mortgage interest rate, lower your monthly payment, or borrow equity to pay for significant expenses. Here are your refinance options for an FHA loan.

FHA Streamline refinance

An FHA Streamline refinance allows you to refinance your mortgage with minimal documentation and paperwork. No appraisal is required. It can often lower your interest rate or monthly payment, but you can't take out more than $500.

FHA cash-out refinance

An FHA cash-out refinance lets you borrow your home's equity by refinancing into a new loan that exceeds your current loan’s outstanding balance. You pay off your current loan and keep the difference in cash to pay for repairs, consolidate debt, or finance a major purchase.

Typically, you can borrow up to 80% of your home’s appraised value, minus the outstanding loan amount. You’ll also need to pay closing costs.

Refinance to a conventional loan

If you qualify, refinancing to a conventional loan may save you money. If you have more than 20% equity, you can stop paying for mortgage insurance.

FAQ about the FHA loan process

Here are answers to common questions about the steps to getting an FHA loan.

How long does the FHA loan process take?

You can expect the entire process to take 30 – 45 days.

What disqualifies you from an FHA loan?

Several things could disqualify you. Common ones include a low credit score or a high DTI ratio, or a bankruptcy. There are also specific standards the property must fulfill. And, of course, your income and employment history must meet lender requirements.

The bottom line: 7 steps to getting an FHA loan

You'll need to take several steps to apply for and buy a home with an FHA loan. You'll need to meet credit score and income thresholds, and the property needs to meet specific standards. Understanding the process can help you successfully apply for an FHA loan and achieve the goal of becoming a homeowner.

If you're ready to explore an FHA loan as part of your borrowing options, consider applying now with Rocket Mortgage.

The 3% down payment option is only available on certain conventional loan products and is not available in all states. Additional terms and conditions may apply.

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.