FHA Loans in 2026: Complete Guide to Qualification, Limits & Benefits

What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration, designed to make homeownership accessible to borrowers who may not qualify for conventional financing. FHA loans are not issued by the government — they're originated by approved lenders like Custom Mortgage Inc.

Key Benefits

• 3.5% minimum down payment (with 580+ FICO score)
• Down to 500 FICO with 10% down
• Lower closing costs than conventional loans
• Gift funds accepted for the entire down payment
• Assumable — a major advantage in high-rate environments

2026 FHA Loan Limits

FHA loan limits vary by county based on local home prices:

| Market Type | 1-Unit Limit | Example Counties | |-------------|-------------|------------------| | Floor (low-cost) | $498,257 | Most rural counties | | Ceiling (high-cost) | $1,149,825 | LA, SF, NYC, DC | | Standard | $498,257-$1,149,825 | Most metro areas |

Who Should Consider FHA?

1. First-time buyers with limited savings
2. Borrowers rebuilding credit (580-640 FICO range)
3. Buyers using gift funds for down payment
4. Borrowers with higher DTI (FHA allows up to 50% with compensating factors)

FHA vs. Conventional: Quick Comparison

| Factor | FHA | Conventional | |--------|-----|-------------| | Min. down payment | 3.5% | 3-5% | | Min. FICO | 500 (10% down) / 580 (3.5% down) | 620-680 | | Mortgage insurance | Required (life of loan w/ <10% down) | Removable at 80% LTV | | Max DTI | 43-50% | 43-50% | | Loan limits | County-specific | Higher for jumbo |

How to Get Started

Getting pre-approved for an FHA loan takes 15-30 minutes. You'll need:

• 2 years of W-2s or tax returns
• Recent pay stubs (30 days)
• 2 months of bank statements
• Government-issued ID

"FHA is the great equalizer. If conventional says no, FHA often says yes — and at competitive rates." — Sam Tehranchi, Custom Mortgage Inc.

Custom Mortgage Inc. is an FHA-approved lender. NMLS #268582. Licensed in AZ, CA, FL, GA, TX.