FHA Loan Calculator Suite Standard FHA FHA vs Conventional MIP Cancella...
FHA Loan Calculator Suite
Standard FHA Loan Calculator
Home Price ($)
Down Payment (%)
Interest Rate (%)
Loan Term (Years)
Minimum 3.5% down payment. Requires Mortgage Insurance Premium (MIP).
FHA vs. Conventional Comparison
Home Price ($)
FHA Down Payment (%)
Conventional Down Payment (%)
Interest Rate Difference (%)
FHA: Lower credit score & down payment. Conventional: No MIP if ≥20% down.
MIP Cancellation Analyzer
Original Loan Amount ($)
Current Home Value ($)
Loan Start Date
For loans after June 2013: MIP lasts 11 years (if ≥10% down) or life of loan (<10% down).
Home Affordability Estimator
Annual Household Income ($)
Monthly Debt Payments ($)
Cash Reserves ($)
Max housing payment = 31% of gross monthly income. Total debt ≤43%.
FHA Refinance Savings
Current Loan Balance ($)
Current Interest Rate (%)
New Interest Rate (%)
FHA Streamline Refinance requires no appraisal or credit check.
Down Payment Assistance Finder
Home Price ($)
Your Savings ($)
State
Grants, forgivable loans, or low-interest loans to cover down payment/closing costs.
DTI Qualifier for FHA
Monthly Gross Income ($)
Housing Payment ($)
Other Monthly Debts ($)
Front-End ≤31%, Back-End ≤43% (can go higher with compensating factors).
Results
Visualization
The Ultimate FHA Loan Guide: Unlock Homeownership with Low Down Payments
What Is an FHA Loan?
FHA loans are government-backed mortgages insured by the Federal Housing Administration. They’re designed to help first-time homebuyers and those with limited savings or lower credit scores achieve homeownership with as little as 3.5% down. While they require Mortgage Insurance Premiums (MIP), they offer more flexible qualification standards than conventional loans.
FHA vs. Conventional Loans: Key Differences
Down Payment: FHA requires just 3.5% down (vs. 3–5% for conventional).
Credit Score: FHA accepts scores as low as 500 (580+ for 3.5% down), while conventional typically requires 620+.
Mortgage Insurance: FHA charges MIP for most of the loan’s life. Conventional loans require PMI only until 20% equity is reached—then it cancels automatically.
Loan Limits: FHA loan limits vary by county and are generally lower than conforming loan limits.
Understanding MIP: The Hidden Cost of FHA Loans
FHA loans require two types of mortgage insurance:
- Upfront MIP: 1.75% of the loan amount, usually financed into the loan.
- Annual MIP: Paid monthly (0.15%–0.75% of the loan balance annually).
For loans originated after June 3, 2013, with less than 10% down, MIP lasts for the life of the loan. This is the biggest drawback of FHA financing—and why many borrowers refinance to conventional once they reach 20% equity.
When Does MIP Cancel?
MIP cancellation rules depend on your down payment and loan start date:
- Loans before June 2013: MIP cancels when loan balance reaches 78% of original value.
- Loans after June 2013 with ≥10% down: MIP cancels after 11 years.
- Loans after June 2013 with <10% down: MIP lasts for the life of the loan.
The only way to eliminate MIP in the last scenario is to refinance into a conventional loan.
FHA Loan Limits and Affordability
FHA loan limits are set by county and range from $472,030 (2024 floor) to $1,149,825 (high-cost areas). Your affordable home price depends on:
- Your income and debt-to-income ratio (DTI)
- Current interest rates
- Available cash for down payment and closing costs
Lenders use a front-end DTI cap of 31% (housing payment) and back-end cap of 43% (total debt), though exceptions exist with strong compensating factors.
Down Payment Assistance (DPA) Programs
Many states and nonprofits offer DPA programs that pair perfectly with FHA loans:
- Grants: Free money that doesn’t need repayment (e.g., CHFA in Colorado).
- Forgivable Loans: Repayment waived after 5–10 years of occupancy.
- Second Mortgages: Low-interest loans for down payment/closing costs.
These programs can bridge the gap between your savings and the required 3.5% down payment + closing costs.
Refinancing Out of FHA
Once you’ve built equity and improved your credit, refinancing from FHA to conventional can save hundreds per month by eliminating MIP. The FHA Streamline Refinance is also an option to lower your rate without an appraisal—but it keeps MIP. Always compare both options using our refinance calculator.
Conclusion: Is an FHA Loan Right for You?
FHA loans are a powerful tool for buyers with limited funds or imperfect credit. They open the door to homeownership that might otherwise be out of reach. However, the lifelong MIP (for most borrowers) means they should be viewed as a stepping stone—not a forever loan. Use this calculator suite to model scenarios, compare options, and create a path to long-term mortgage savings.
Frequently Asked Questions
A: 500 with 10% down payment; 580+ for the minimum 3.5% down payment. Most lenders prefer 620+ for better terms.
A: Only if your loan started before June 2013 OR you put ≥10% down on a newer loan (then MIP cancels after 11 years). Otherwise, MIP lasts for the life of the loan.
A: No! Repeat buyers can use FHA loans, but they must occupy the home as their primary residence.
A: The standard limit is 43% back-end DTI, but lenders may approve up to 50% with strong compensating factors (large reserves, high credit score).
A: Yes—1.75% of the loan amount. But it’s typically rolled into the loan, so you don’t pay it out of pocket at closing.
A: Yes! 100% of the down payment can come from gifts, grants, or DPA programs—as long as the donor provides a gift letter.
A: MIP is for FHA loans and usually lasts for the life of the loan. PMI is for conventional loans and cancels automatically when you reach 20% equity.