An FHA loan lets you buy with as little as 3.5% down and a credit score that would stop most conventional loans. Clear2 matches your file with the FHA lender most likely to approve it at a good rate.
An FHA loan is a mortgage insured by the Federal Housing Administration. That insurance protects the lender if a borrower defaults, so lenders can approve lower credit scores and smaller down payments than they would on a conventional loan. For first-time buyers and people rebuilding their credit, it is often the most realistic way to buy a home.
FHA requires 3.5% down with a 580 credit score or higher. On a $300,000 home, that is $10,500 at closing instead of $60,000 for a 20% down conventional loan.
FHA accepts scores as low as 500 with 10% down. Past bankruptcies, foreclosures, and collections have set waiting periods instead of permanent disqualification.
With strong compensating factors, FHA can approve debt-to-income ratios well above conventional limits. That helps buyers carrying student loans or a car payment.
Loan limits, local programs, and market conditions differ from state to state. Pick your state for the details that apply where you're buying.
HUD sets FHA loan limits by county every year. Most of the country uses a standard floor limit, and higher-cost metro areas get a higher ceiling. Your loan officer will confirm the exact limit for the county where you're buying.
Limits are set by HUD and adjust each January. See your state page above for county-level figures.
FHA sets the base rules, and each lender can add its own overlays on top. As a broker, Clear2 looks for the lender whose overlays fit your file.
Both loans have a place. Here is how they compare on the questions buyers ask most.
FHA works best for a few specific borrower profiles.
If you haven't saved a large down payment yet, 3.5% down gets you out of renting sooner. Many first-time buyers pair FHA with state down payment assistance.
FHA has defined waiting periods after a bankruptcy or foreclosure and accepts lower scores, so a past setback doesn't have to keep you out of the market.
FHA finances 2 to 4 unit properties when you live in one unit. Rent from the other units can help cover the mortgage.
Three common situations where FHA made the purchase work.
A teacher with $14,000 saved wanted a $280,000 home. Conventional pricing at a 610 score was expensive. FHA with 3.5% down fit the budget and left money for moving costs.
A couple had a foreclosure five years earlier and a 565 score. With a family gift covering 10% down, they qualified for FHA and bought again.
A buyer purchased a duplex, moved into one side, and counted expected rent from the other side toward qualifying.
FHA is one of the programs Clear2 closes most. Because we work with dozens of FHA lenders, we can place your loan with the one whose guidelines and pricing fit your file.
You work with one loan officer from your first question to the closing table. Clear2 is licensed in 22 states, and every loan officer has the same lender network behind them.
Clear2 Mortgage2600 W Big Beaver Rd, Suite 100Troy, MI 48084(248) 970-0040
Christopher Kas-Marogi founded Clear2 Mortgage and has more than $1 billion in funded residential loans. He built Clear2 as an independent broker so borrowers could get their loan matched to the right lender instead of a single bank's product list.
Five-star reviews from Clear2 clients on Google.
"Donavin was straightforward and a breeze to work with. Communication was quick and easy. The whole process was seamless and he was available for guidance or questions. I would not hesitate to use Clear2 Mortgage in the future."
"Alex was absolutely amazing from the beginning. He was patient and thorough with all of our questions. He even followed up after the process was finalized to ensure everything was still good. I would recommend him to everyone!"
"The process was seamless and every question I had as a first-time home buyer was answered. My loan officer gave me his professional opinion based on my specific circumstances to personalize my loan."
Can I use gift money for my FHA down payment?
Yes. FHA allows the full down payment to come from a family member, employer, or approved nonprofit. The donor signs a gift letter confirming the money doesn't need to be repaid.
How much is FHA mortgage insurance?
FHA charges an upfront premium of 1.75% of the loan amount, usually added to the loan, plus an annual premium paid monthly. With less than 10% down, the annual premium stays for the life of the loan unless you refinance.
How long after bankruptcy can I get an FHA loan?
FHA generally requires two years after a Chapter 7 discharge. After filing Chapter 13, you may qualify after one year of on-time plan payments with court approval.
Do FHA loans have income limits?
No. FHA has no income cap. Income limits apply to some down payment assistance programs, which your loan officer can check for you.
Can I buy a multi-unit property with FHA?
Yes. FHA finances 1 to 4 unit properties as long as you live in one of the units as your primary home.
Why use a broker for an FHA loan?
A bank can only offer its own FHA product and its own overlays. Clear2 works with many FHA lenders and places your loan with the one that fits your credit, income, and timeline.
No obligation and no hard credit pull to start. Just a clear picture of what you qualify for.
Clear2 Mortgage, LLC. NMLS #1911663. Licensed Mortgage Broker. 2600 W Big Beaver Rd, Suite 100, Troy, MI 48084. Equal Housing Lender. This is not a commitment to lend. All loans subject to credit approval, property appraisal, and underwriting guidelines. Rates and terms subject to change without notice.
