Best FHA Lenders

Angel Oak Mortgage Solutions was recognized as the premier option for top FHA lenders.

Are you struggling to save up a 20% down payment for your dream home? Or maybe you’ve heard that you should have a great credit score before you buy? Fortunately, you don’t need a big down payment or perfect credit for an FHA loan. Here’s everything you need to know about FHA loans.

Quick Look: The Best FHA Lenders

• Best for Bank Statement Loans: Angel Oak Mortgage Solutions
• Best for a Variety of Options: New American Funding
• Optimal for Online Loans: Rocket Mortgage
• Best for Low Credit Scores: Carrington Mortgage Services
• Best for Education: Guild Mortgage
• Best for First Time Home Buyers: Bank of America
• Best for Mobile: Fairway Independent Mortgage Corporation
• Best for Service Members: Navy Federal Credit Union

Top FHA Lenders

Where should you start your search? Here are the 8 best FHA lenders we found, all based on careful research.

1. Best for Bank Statement Loans: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio Non-QM mortgage loans. The mortgage company is licensed in 45 states and offers competitive rates and quick closing times. 

Angel Oak Mortgage Solutions offers a wide range of mortgage solutions for various needs. Whether you are looking to purchase a home, cash-out on your current property, or refinance at a different rate, they have options for you.

With loan amounts available up to $3.5 million, they can support you in financing properties of different values. They cater to primary residences, second homes, and investment properties, and accommodate various types of properties such as single-family homes, townhomes, and condos.

As an added convenience, they offer options for self-employed borrowers and real estate investors who may not have tax returns readily available. They also provide opportunities for those with 1099 income and offer government loan products like FHA, USDA, and VA loans.

With competitive rates on conventional purchase and refinance, Angel Oak Mortgage Solutions ensures that you have options to suit your financial goals.

2. Best for a Variety of Options: New American Funding

An FHA loan is ideal for those with less-than-perfect credit or no credit history. You'll have the option of 30-year fixed or 15-year fixed loans with a low down payment option. To qualify for an FHA loan through New American Funding you'll need a credit score of 580 or higher, 3.5% - 10% down depending on credit score, and proof of steady income. Along with that, mortgage insurance is required, there are higher home inspection standards and the loan will have to be used for a primary, residential property. 

New American Funding has an A+ rating with the BBB and over 236k reviews. There's something to be said about reputation and borrower satisfaction when it comes to New American Funding. Apply today for an FHA loan.

3. Optimal for Online Loans: Rocket Mortgage

Rocket Mortgage offers digital tools backed by award-winning customer service. Its speedy processing helps borrowers get into homes sooner rather than later.

Rocket Mortgage offers low APR financing, which includes all the fees associated with a mortgage, including mortgage insurance. It also offers conventional and VA mortgages. 

4. Best for Low Credit Scores: Carrington Mortgage Services

Carrington Mortgage Services offers many products for borrowers with low credit scores, including FHA mortgages. The company works with credit scores as low as 500.

Carrington Mortgage offers FHA, VA, USDA and conventional mortgages. It also offers proprietary programs to help first time buyers and buyers who have had financial challenges. 

5. Best for Education: Guild Mortgage

The mortgage process can be intimidating. If you’re curious about what to expect, Guild Mortgage offers a wealth of resources.

It offers several calculators to help you explore different scenarios and mortgage options.

Guild Mortgage offers FHA, VA, USDA and conventional mortgages as well as special programs for nontraditional credit histories. 

6. Best for First-Time Home Buyers: Bank of America

Bank of America is an excellent choice for first time homebuyers. It has branches across the country so it’s easy to talk to a loan officer in person.

Do you want to meet in person for education and guidance?

If so, Bank of America is a great choice. You can start the mortgage process online or in person, whichever you prefer. Bank of America offers FHA, VA and conventional mortgages as well as proprietary mortgage products. 

7. Best for Mobile: Fairway Independent Mortgage Corporation

Fairway Independent Mortgage Corporation offers a wide range of mortgage products, including FHA, VA, USDA, conventional and jumbo mortgages.

Its FairwayNow mobile app really sets it apart.

You can do every step of the mortgage process through the mobile app. You can upload documents, talk to a loan officer and see live status updates on your phone. 

8. Best for Service Members: Veterans United

If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.

In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.

Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.

What Is FHA?

The Federal Housing Administration insures FHA loans. Private lenders approved by the FHA offer these loans — the FHA helps lenders recover their money if you don’t repay your home loan. This insurance lowers the risk to the lender and allows lenders to offer these mortgages to a variety of borrowers. The FHA has insured more than 46 million mortgages since it was founded in 1934. 

The FHA backs several types of mortgages, including:

• Purchase mortgages
• Refinances for FHA mortgages
• Home rehabilitation loans
• Reverse mortgages

What sets FHA mortgages apart from other types of home loans are its flexible requirements. These include:

• Low down payment requirements: You can make a down payment of as little as 3.5% if you have a 580 credit score or higher. 
• Low credit score requirements: Lenders can offer FHA mortgages to borrowers with credit scores as low as 500. Borrowers with credit scores of 500–579 are required to make a down payment of at least 10%. Look at your credit score for free at Annual Credit Report to help you decide how to save for a house. 

FHA mortgages require borrowers to pay mortgage insurance. Borrowers pay an upfront insurance premium and an annual premium. The monthly mortgage payment includes the cost of mortgage insurance. 

FHA mortgages also have limits. The limit is $314,827 in lower-cost areas. You may be able to borrow as much as $726,525 if you live in a high-cost area. Hawaii and Alaska allow even higher mortgages. You can find the limits for your area through the Department of Housing and Urban Development (HUD). Keep these limits in mind when you decide how much house you can afford. 

What to Look for in an FHA Lender?

You don’t want to choose just any lender for something as important as your mortgage. Here are a few things to look for in the best FHA lenders:

FHA Approval

The FHA must approve lenders that offer FHA mortgages. You can find a list of approved lenders on the HUD website. 

FHA Experience

FHA mortgages are complex. Ask potential lenders how often they handle FHA mortgages. You can also ask where they rank in your state when it comes to FHA loan originations, so choose a lender with experience. 

Other Mortgage Options

An FHA mortgage might be the best fit for you. Just in case it’s not, though, consider what other mortgage options the lender has. Let’s say you have a lower credit score. Does your potential lender have other loan products for borrowers with lower credit scores? 

Digital Tools

Delivering documents in person takes time out of your day. Having the option to upload documents digitally saves time and speeds up the mortgage process. Ask potential lenders about their digital tools (and their cybersecurity practices). If you like working on your phone, look for a lender with a mobile app. 

Speedy Processing

It takes time to get approved for a mortgage. Some lenders are faster than others, though. Ask potential lenders how long it takes to close an FHA mortgage. Keep that information in mind when you choose your lender. 

Excellent Service

Choose a lender with a reputation for excellent service. You can also check on lender complaints on the Better Business Bureau website. Get a sense of its service when you contact the lender for preapproval. If the lender isn’t prompt or doesn’t seem helpful, consider going with someone else.

Your instinct is one of the best guides when it comes to finding a lender. If something seems “off,” trust your gut and move on. 

Tips for Finding the Best FHA Lender

Ready to find the best FHA lender? Here are 5 tips to help make your process easier:

1. Ask Family and Friends for Recommendations

Talk to your family and friends about your lender search. They might be able to recommend a good loan officer or lender. Other professionals you work with, like accountants or lawyers, might be able to make recommendations as well. 

2. Consider Working with a Housing Counselor

A housing counselor is a professional who can help you get ready for a mortgage. These counselors are neutral, so they can help you select the best lender for you. Their services are free or low-cost. Find a counselor near you. 

3. Contact at Least 3 Lenders

Each FHA lender sets its own interest rates and fees. The more lenders you contact, the better. Contacting multiple lenders gives you the best chance of finding the lowest interest rate and fees. Mortgage rates change daily, so try to contact all your potential lenders on the same day to make the most accurate comparison possible.

4. Write Down Your Questions

Make a list of your questions before you contact lenders. Note each lender’s answers. If any lender is hesitant about answering your questions, note that as well. 

5. Look at the Total Cost of Your Mortgage

The interest rate is important but it only tells part of the story. Review your rate quotes carefully. Look for origination fees, application fees and discounts. Keep the big picture in mind. 

Contacting multiple lenders takes time, but it’s time well spent. Let each lender know you’re interested in an FHA mortgage so you get the most accurate quote possible.

Find the Right FHA Lender

Choosing the right FHA lender takes time. Even a small interest rate difference can save you thousands, so it’s worth taking the time to compare. Keep in mind that you might be able to refinance your mortgage and get a better rate. 

An FHA mortgage may not be the best product for you. You may want to compare FHA mortgages and conventional mortgages if you have a good credit score to see which offers the best rates. You may also qualify for a VA mortgage or a USDA mortgage. In that case, you may want to explore these to see which suits you best. Explore state and local homebuyer programs to see if additional assistance is available. You may be able to qualify for down payment or closing cost assistance. 

FHA mortgages are a solid option for many homebuyers. The low down payment and flexible down payment options make them especially well-suited for first time homebuyers. More experienced homebuyers may find them helpful as well. 

Frequently Asked Questions