Best FHA Loan Lenders of 2020 StaffFeb. 26, 2020

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Enjoy Your Own Home With the Best FHA Mortgages
FHA mortgage loans are an attractive option for first-time homebuyers. If you’re looking for your first home and don’t have 20% of the home purchase price for a conventional loan down payment, FHA loans backed by the U.S. government can offer between 3.5% and 10% down payments.
There are some costs though, and different rates and terms with different lenders, so compare the best lenders to get the FHA mortgage that works for you.

Best Lenders for FHA Loans

Loan ProviderCredit ScoreTop ProVisit Site


500Single form, compare lenders in minutesView Rates
Quicken Loans
500Super easy online applicationView Rates

620No commission or origination feesView Rates
Paramount BankNot publishedStrong financial institutionView Rates
FHA Rate GuideNot specifiedConnections with hundreds of lendersView Rates

What Kind of Credit Do You Need for an FHA Loan?

Borrowers with a credit score of at least 580 can secure an FHA insured loan with just a 3.5% down payment, while borrowers with a lower credit score of 500-579 will be asked to pay 10% of the value of the loan as a down payment. Under the terms of an FHA loan, borrowers are also required to pay two types of private mortgage insurance (PMI): an upfront payment of 1.75% of the value of the loan, plus up to 0.85% per annum.

What Do You Need to Know About the FHA Loan Approval Process?

The process of applying for an FHA loan is similar to applying for a traditional loan, except it must be done with an FHA-approved lender, and you will need to show you meet the minimum credit score and other requirements specific to an FHA insured loan. See here for a complete list of guidelines.

FHA Loan Limits

You can take out FHA loans only up to certain limits, determined by median local home values in your county. Most locations fall under the standard FHA limits, but there are places that are considered high cost, and have higher limits. There are even places in several very high cost areas, with a special exception FHA loan limit. 

Standard Limits: 

Home TypeStandard FHA Loan Limits
1-unit property$421,100
2-unit property$543,000
3-unit property$656,350
4-unit property$815,650

High Cost Limits: 

Home TypeHigh-Cost FHA Loan Limits
1-unit property$636,150
2-unit property$814,500
3-unit property$984, 525
4-unit property$1,223,475

Special Exception Limits:

Home TypeSpecial Exception FHA Loan Limits
1-unit property$721,050
2-unit property$923,050
3-unit property$1,115,800
4-unit property$1,386,650

How to Apply for FHA Loans

In order to qualify for an FHA loan, you’ll need to show you meet all the prerequisites set by the Federal Housing Administration. Your lender will ask for the following:

  • Proof of verifiable income and proof that you’ve been in consistent employment for at least 2 years
  • Evidence that your monthly mortgage payments won’t exceed 30% of your borrower’s monthly income
  • Your agreement to pay Private Mortgage Insurance, although you can apply to stop paying PMI once you pay back 20% of the loan
  • If asked, you’ll need to prove you haven’t filed for bankruptcy in the past 1-2 years and haven’t had a foreclosure in the past 3 years

What does FHA Pre-Approval Mean?

A pre-approval is a written, conditional commitment from a lender for a specific loan amount and is usually valid for 60 to 90 days. Where FHA loans are concerned, your lender will check that you meet all the usual requirements for a loan as well as the minimum credit requirements. Pre-approval is something you apply for before finding a home or if you’re in the process of negotiating with a seller. In a competitive housing market, pre-approval can give a buyer a big advantage over rival bidders. In fact, some sellers prefer to see a written commitment from a lender as it reassures them that the house sale won’t fall through at a later stage.

How Do You Get Pre-Approved for an FHA Loan?

Just as it would if you were applying for a conventional loan, your lender will ask you for:

  • Personal information, such as driver’s license, state ID card, or social security number
  • Proof of income, in the form of pay stubs and W2 forms
  • Bank and investment statements to show you can pay the 3.5% or 10% down payment
  • Other financial information testifying to your ability to make payments, such as bills and reports on additional income sources

When assessing your application for pre-approval, your lender will also pull a hard credit inquiry in order to check whether you meet the minimum credit requirements (of 520 for a 10% down payment or 600 for a 3.5% down payment). A hard inquiry can affect your score for up to 2 years. However, the credit bureaus typically consider all inquiries made within a 45-day period to be a single inquiry. Therefore, if you’re shopping around for FHA loans or you’re unsure whether you’ll be approved, it’s worth applying to all your preferred lenders within a short period of time so as not to cause unnecessary damage to your credit score.

1. LendingTree


Minimum credit score: 500

Minimum down payment: 3.5%

  • Check your credit score and how it affects your offers 

  • One form and information is sent to multiple lenders 

  • Get loan offers within minutes

LendingTree has become a major player in the mortgage industry through a straightforward recipe of helping users get matched with loan offers within a matter of minutes. 

You don’t need to have a high credit rating to use LendingTree, though usually better credit and a higher down payment will mean better terms. 

LendingTree won’t charge you a fee for connecting you with a lender, and can also provide you with free credit scoring. The process is streamlined and very easy, and within minutes you will be able to compare a wide range of options at your own leisure. 

LendingTree LendingTree View Rates

2. Quicken Loans 

Quicken Loans

Minimum credit score: 500+ for 10% down payment, 580+ for 3.5% down payment

Minimum down payment: 3.5% based on qualifying credit

  • Largest FHA lender
  • Streamlined application process
  • Extensive education resources

Quicken Loans is the largest FHA lender in the U.S., and one of the largest lenders in general. It offers lots of educational resources to prospective borrowers, as well as a streamlined application process. Prospective borrowers may open an application for an FHA loan by talking to one of Quicken’s home loan experts or by applying online through its Rocket Mortgage platform (more on that below).

As the name suggests, everything about Quicken is designed to save time: it offers borrowers the option of filing documents online, the support team is available outside of regular bank hours, and it will provide you constant real-time updates to keep your FHA loan application moving.

Quicken Loans Quicken Loans View Rates

3. Better Mortgage

Minimum credit score: 620

Minimum down payment: 3%

  • No origination or lender fees 

  • Many different fixed and variable rate loans 

  • Fast approval process

Mortgages can be made easier with Better, which offers a digital mortgage platform that is designed to help users find loans based on their own specific needs. 

The online application process takes a matter of minutes, and users will receive a customized loan estimate, automatic discount finder, and personalized rate. They can also use a non-commissioned loan office and an extensive online knowledgebase.  

With Better Mortgage you may find high closing costs and the service doesn’t facilitate the widest variety of loans. View Rates

4. Paramount Bank

Paramount Bank

Minimum Down Payment: 0% for VA loans, 3%-20% for conventional

Minimum Credit Score: Not published

  • Pre-approval
  • Lots of educational info available online
  • Strong financial institution

As a pillar of the financial industry, Paramount Bank has been providing banking services for half a century. Today, the company is also an HUD-approved lender with Fannie Mae/Freddie Mac agency products aplenty. Paramount Bank is also delegated FHA/VA, FHA 203K, and USDA-approved. In short, this is a company that you can trust.

Paramount Bank offers a simple process: apply, upload documents, review loan details, and close. It’s simple, it’s fast, and it’s understandable.

Paramount Bank Paramount Bank View Rates

5. FHA Rate Guide

FHA Rate Guide

Minimum Down Payment: None specified

Minimum Credit Score: None specified

  • Connections with hundreds of lenders
  • Detailed questionnaire for the best possible match

FHA Rate Guide isn’t a direct lender. Instead of laying out all the features and types of mortgages on offer, FHA Rate Guide asks you about your mortgage needs, then emails you eligible loans that fit your circumstances. FHA Rate Guide doesn’t help you to complete your loan application or negotiate better mortgage rates; it simply sends you information about potential mortgage products.

FHA Rate Guide FHA Rate Guide View Rates

Can You Be Denied a Loan After Pre-Approval?

Pre-approval is a conditional commitment from the lender to provide you a loan to a certain amount, but the lender is not legally obligated to provide the loan. However, if you haven’t yet found a home or if you’re having trouble getting a seller to agree to sell you a home, then it’s worth going through the pre-approval process as this gives you an advantage over buyers who haven’t been pre-approved.

Because of the unique specifications, it’s worth seeking out a top FHA lender that has experience with these loans, such as the 5 lenders listed above.