FHA Loan Calculator · Practical guide
FHA Loan for First-Time Home Buyers
FHA loans let first-time buyers purchase with 3.5% down and a 580 credit score — here is what the payment looks like.
At a glance
Why First-Time Buyers Pick FHA
FHA loans are insured by the Federal Housing Administration and built for buyers without large savings or perfect credit. The headline benefits are a 3.5% minimum down payment with a credit score of 580 or higher, more forgiving debt-to-income rules than most conventional loans, and competitive interest rates. On a $250,000 starter home, 3.5% down is just $8,750 — versus $50,000 for a conventional 20% down payment.
Interactive tool
FHA Loan Calculator
Enter your own values, then compare the result with the examples below.
What the Payment Looks Like
On a $250,000 home with 3.5% down at 6.5% for 30 years, the calculator shows:
- Base loan: $241,250
- Upfront MIP (1.75%): $4,221.88, rolled into a total loan of $245,471.88
- Monthly principal and interest: $1,551.55
- Monthly MIP (0.55% annual): $110.57
- Total: about $1,662.12 per month, before taxes and insurance
The Catch: Mortgage Insurance
The trade-off for the low down payment is FHA mortgage insurance — an upfront premium of 1.75% plus an annual premium of about 0.55% paid monthly. With less than 10% down, the annual MIP stays for the life of the loan, so many first-time buyers refinance to a conventional loan once they build 20% equity.
Ways to Lower Your Cash Needed at Closing
- Ask the seller for concessions toward closing costs (FHA allows up to 6% of the price).
- Use gift funds from family — FHA permits the entire down payment to be gifted.
- Look into state and local down payment assistance programs, which pair well with FHA loans.
Run your actual price and rate in the calculator above to see your real monthly number before you shop.
Frequently Asked Questions
Do I have to be a first-time buyer to use an FHA loan?
No. FHA loans are open to repeat buyers too. The main restriction is that the home must be your primary residence, and you can generally hold only one FHA loan at a time.
What credit score do I need for an FHA loan?
A score of 580 or higher qualifies you for the 3.5% minimum down payment. Scores from 500 to 579 require 10% down, and individual lenders often set their own higher minimums.
Are there FHA loan limits?
Yes. FHA caps loan amounts by county, with higher limits in expensive markets. Check the current limit for your county before shopping at the top of your budget.
Can I buy a fixer-upper with an FHA loan?
Yes, through the FHA 203(k) program, which rolls renovation costs into the mortgage. Standard FHA loans require the property to meet minimum safety and habitability standards.