FHA Loans Mortgage Questions

Explore sample FHA Loans questions and educational explanations from the RatesQ team.

• Can I do an FHA Streamline Refinance after 6 payments?

  I have an FHA loan I closed about 7 months ago. My rate is 7.25% and I've seen rates dip a bit. A coworker mentioned FHA Streamline lets you skip the appraisal. Is that true and how soon can I do it? Do I need to have 6 payments specifically or is it more like a seasoning window?

  The FHA requires at least 6 payments made on the existing FHA loan, and at least 210 days must have passed since your original closing. If you closed 7 months ago you're right at the edge — double-check the exact closing date. The no-appraisal option is real for non-credit-qualifying Streamlines, but your lender can still add overlays. Also look at the UFMIP refund — if your original FHA loan is within 3 years, you get a partial credit on the new upfront MIP.

  FHA Streamline reviews include seasoning and net tangible benefit requirements. Even when a new appraisal is not required, closing costs can still apply. Financing costs or receiving lender credits changes the loan balance or pricing. A written Loan Estimate shows the actual fees and terms.

  Did this last year. Took about 3 weeks to close. The no-appraisal part was the best — saved time and stress. Just make sure you have 0x30-day late payments in the last 12 months or the lender will flag it.

• FHA vs Conventional for a first-time buyer with 10% down?

  I have 10% down and a 685 credit score. My lender quoted me both an FHA loan and a conventional loan. The FHA rate is 0.25% lower but has MIP. The conventional has a higher rate but no MIP eventually. Which makes more sense?

  Key FHA detail: with 10% down, FHA MIP now lasts 11 years (used to be for life). With less than 10% down, it's for the full 30 years. So at 10% down, FHA MIP isn't permanent. But you also pay the 1.75% upfront MIP which gets rolled in. The math really comes down to running the numbers on your specific loan amounts.

  This is very scenario-specific. At 685 credit with 10% down, conventional PMI will be in the 0.6-0.8% annual range. FHA monthly MIP is 0.55% for most loan amounts (2024+ rates). Run the comparison: FHA PITI+MIP vs conventional PITI+PMI for year 1 through year 11 (when FHA MIP drops off) and year 1 through loan payoff. Also remember the FHA UFMIP ($3,500 on a $200k loan) adds to the loan balance. At 685 score, conventional is often competitive with FHA and gives you more flexibility for removal. Get quotes for both and compare the actual Loan Estimates side by side.

  I was in this exact situation at 688 credit. Went conventional. PMI dropped off after about 4 years when values rose and I hit 80% LTV. Felt better than paying MIP for 11 years.

• What does FHA mortgage insurance (MIP) actually cost?

  I know FHA loans have MIP but I don't understand the math. My loan would be around $320,000. What's the upfront cost and what's the monthly hit?

  Concrete math for your $320k loan: UFMIP = 1.75% × $320,000 = $5,600. This gets rolled into the loan so your actual loan balance becomes $325,600. Monthly MIP: $325,600 × 0.55% / 12 = about $149/month. This continues for the full 30-year term if you put less than 10% down, or 11 years if you put 10% or more down. The 0.55% annual rate applies to most standard 30-year FHA loans — it was reduced from 0.85% in March 2023 which made FHA significantly more competitive.

  Don't forget MIP also applies to refinances — if you do an FHA streamline later, you're starting a new MIP period. Something to factor in when comparing whether FHA or conventional makes more long-term sense for your situation.

• What credit score do I actually need for an FHA loan?

  I've seen 500, 580, 620 mentioned in different places. What's the real answer for 2025? And does a lower score mean I can't get 3.5% down?

  The FHA guidelines say 580 for 3.5% down and 500-579 for 10% down. But 'FHA guidelines' and 'what lenders will actually do' are different things. Most lenders who originate FHA loans impose their own overlays — commonly 620 or 640 minimum. If your score is 580-619, you'll find fewer lenders willing to work with you. If you're at 500-579 and need 10% down FHA, the pool is very small.

  One good thing about FHA vs conventional: FHA does not have loan-level price adjustments (LLPAs) based on credit score like conventional does. So at 580 credit, your FHA interest rate won't be dramatically higher than someone at 740 — the MIP is the same, the rate is similar. That's a meaningful advantage vs. conventional where a lower score can add significant pricing. If you're below 620, FHA is often your best path to competitive mortgage pricing.

• FHA Streamline with no appraisal: is that actually legit?

  My LO mentioned I might not need an appraisal for an FHA Streamline refinance. That seems too good to be true. How is that possible and are there any catches?

  It's legit. The FHA designed Streamline specifically to reduce barriers for existing FHA borrowers to refinance into lower rates. The 'streamline' part means they skip the full income documentation and appraisal because you've already demonstrated your ability to pay (ongoing payment history). The no-appraisal path uses your original purchase price (or existing appraised value) as the basis. Lender overlays can still require an appraisal, but many lenders follow FHA guidelines and skip it.

  I did an FHA Streamline last year. No appraisal, no income docs, closed in about 21 days. The only 'catch' is you need a clean 12-month payment history and it has to result in a net tangible benefit to you. Very smooth process overall.