FHA Loan
A mortgage insured by the Federal Housing Administration (FHA), allowing borrowers with credit scores as low as 580 to qualify with a 3.5% down payment (or 500 with 10% down). FHA loans require mortgage insurance premiums (MIP). Popular with first-time homebuyers.
Related guides
- Full credit & FICO® glossary
Browse all defined terms by category.
- Mortgage
A loan used to purchase or refinance real estate, where the property serves as collateral. Mortgages are installment loans with terms typically ranging from 10 to 30 years. Missing mortgage payments can lead to foreclosure. Minimum credit scores vary by loan type (FHA: 500, conventional: 620).
- Conventional Loan
A mortgage not insured by the federal government, following guidelines set by Fannie Mae and Freddie Mac. Requires a minimum credit score of 620. Offers better interest rates than FHA for borrowers with good credit, and private mortgage insurance (PMI) can be removed once you reach 20% equity.
Frequently Asked Questions About FHA Loan
What does FHA Loan mean?
A mortgage insured by the Federal Housing Administration (FHA), allowing borrowers with credit scores as low as 580 to qualify with a 3.5% down payment (or 500 with 10% down). FHA loans require mortgage insurance premiums (MIP). Popular with first-time homebuyers.
Is FHA Loan important for my FICO® score?
Understanding FHA Loan helps you manage your credit profile more effectively, which in turn supports a stronger FICO® score.