FHA loans in 2026: limits, down payment and mortgage insurance
The 2026 FHA loan limits, the 3.5% minimum down payment and how FHA mortgage insurance works.
Sourced from official pages · Updated September 30, 2026💡 Key takeaways
- FHA loans allow down payments as low as 3.5% and are insured by the Federal Housing Administration.
- Mortgage insurance is required: an upfront premium of 1.75% of the base loan plus an annual premium paid monthly.
- 2026 one-unit loan limits run from $541,287 (floor) to $1,249,125 (ceiling) depending on the county.
- Compare the total monthly payment with a conventional loan with PMI.
2026 FHA loan limits (one-unit)
| Limit | |
|---|---|
| National “floor” (lower-cost areas) | $541,287 |
| National “ceiling” (high-cost areas) | $1,249,125 |
FHA limits vary by county and are set between the floor and the ceiling for one-unit homes. Look up your county’s limit on HUD’s FHA mortgage limits tool.
Down payment and credit
FHA loans allow down payments as low as 3.5%. FHA loans allow lower credit scores than most conventional loans, but lenders set their own minimums, so ask each lender.
Mortgage insurance
Mortgage insurance is required on all FHA loans. FHA charges an upfront mortgage insurance premium of 1.75% of the base loan amount (often financed into the loan) and an annual premium paid monthly whose rate depends on the loan amount, term and loan-to-value. Check the current annual rate on HUD’s premium page or your Loan Estimate.
Compare with conventional
Because FHA requires mortgage insurance for the life of the loan in many cases, compare the total monthly payment with a conventional loan with PMI. Use our mortgage calculator (add the monthly insurance in the PMI field) to compare.
Who FHA loans suit
FHA loans are often used by first-time buyers and by buyers with smaller down payments or lower credit scores than many conventional loans allow. Lenders set their own minimum scores, so ask several.
Costs beyond the interest rate
- Upfront mortgage insurance premium: 1.75% of the base loan amount, often financed into the loan.
- Annual premium: paid monthly; the rate depends on the loan amount, term and loan-to-value.
- Standard closing costs, as on any mortgage.
FHA vs conventional with PMI
A lower interest rate on an FHA loan can be offset by mortgage insurance that lasts for many years. Get Loan Estimates for both and compare the total monthly payment and the cost over the time you expect to keep the loan.
🔤 Key terms
| Term | Meaning |
|---|---|
| UFMIP | Upfront mortgage insurance premium: 1.75% of the base loan amount |
| Annual MIP | Annual mortgage insurance premium paid monthly; the rate depends on loan amount, term and loan-to-value |
| Base loan amount | The loan before the financed upfront premium is added |
| FHA loan limit | The maximum FHA loan in your county, between the national floor and ceiling |
Step by step: getting an FHA loan
- Check your county’s FHA limit on HUD’s tool.
- Ask FHA-approved lenders for Loan Estimates.
- Get preapproved and shop for a home that meets FHA property standards.
- Order the appraisal through your lender.
- Compare the total monthly payment to a conventional loan with PMI before you commit.
Scenarios
| Situation | What to consider |
|---|---|
| Small down payment, moderate credit | FHA may fit; compare with low-down-payment conventional loans |
| Large down payment and strong credit | A conventional loan may cost less because PMI can be avoided |
| You may refinance later | Ask about how mortgage insurance would be treated and the cost of refinancing |
🧮 Example: the upfront premium on a $300,000 base loan
At 1.75%, the upfront mortgage insurance premium on a $300,000 base loan is $5,250. If it is financed, the loan balance becomes $305,250 and you pay interest on it. This is an illustration; use your Loan Estimate for actual figures.
⚠️ Common mistakes to avoid
- Ignoring the annual mortgage insurance premium when comparing loans.
- Assuming FHA is always the cheapest option for small down payments.
- Not checking your county’s FHA loan limit.
- Forgetting that the upfront premium is usually financed and accrues interest.
🛠️ Try it yourself
❓ Frequently asked questions
What is the minimum down payment for an FHA loan?
3.5% (CFPB).
Is mortgage insurance required on FHA loans?
Yes, on all FHA loans.
Where can I look up my county’s FHA limit?
HUD’s FHA mortgage limits tool, linked in the sources.
Can I use an FHA loan for any property?
FHA loans are generally for owner-occupied primary residences that meet FHA property standards.
Can I finance the upfront premium?
Often yes; it is commonly financed into the loan, which increases the balance.
Does the seller have to accept an FHA loan?
Sellers can decide; a property must also meet FHA standards.
📚 Sources
This guide is general information, not financial, tax or legal advice. Rules and limits change; confirm with the sources above or a licensed professional.