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FHA purchase financing for eligible borrowers. Credit, property, appraisal and underwriting requirements apply. Upfront and annual mortgage insurance generally apply.

FHA Loan

An FHA loan is a government-insured mortgage program backed by the Federal Housing Administration and designed to make homeownership more accessible for a broader range of borrowers. FHA financing is especially popular among first-time homebuyers, borrowers with moderate credit challenges, and buyers seeking more flexible qualification standards.

Eligible FHA purchase borrowers may qualify with down payments as low as 3.5%. Credit, income, debt-to-income, property, appraisal and participating-lender underwriting requirements apply. FHA financing generally includes upfront and annual mortgage insurance.

WestFi is not a government agency and is not affiliated with HUD, FHA, VA, or any other government agency. FHA loans are insured by the Federal Housing Administration. Eligibility, participating-lender approval, and program requirements apply.

FHA loans are commonly used for:
  • First-time home purchases
  • Lower down payment financing
  • Borrowers rebuilding credit
  • Higher debt-to-income scenarios
  • Multi-unit owner-occupied properties
  • Refinancing into more affordable payments
FHA underwriting considerations:
  • Credit, debt-to-income, documentation and property requirements apply
  • Participating-lender requirements and the complete borrower profile determine eligibility
Higher approvals may be supported by:
  • stronger credit scores
  • stable employment
  • cash reserves
  • lower overall risk profile

FHA Mortgage Insurance (MIP)

FHA loans require two forms of mortgage insurance.

Upfront Mortgage Insurance Premium (UFMIP):
  • Current UFMIP is typically 1.75% of the base loan amount
  • Most borrowers choose to finance UFMIP into the loan rather than paying it out of pocket at closing
Annual / Monthly Mortgage Insurance Premium (MIP):
  • FHA loans also require ongoing annual mortgage insurance, paid monthly as part of the mortgage payment
  • Current annual MIP rates generally range from 0.15% to 0.75%
  • The applicable annual premium depends on:
  • • loan term
  • • loan amount
  • • loan-to-value ratio (LTV)
  • • down payment amount
Duration of MIP, in many cases:
  • Borrowers with less than 10% down may pay monthly MIP for the life of the loan
  • Borrowers with 10% or more down may have MIP removed after 11 years under current FHA guidelines

FHA Streamline Refinance

Refinance with reduced documentation. For eligible existing FHA borrowers. An FHA appraisal is generally not required; income documentation depends on the streamline type and lender requirements. Payment-history, seasoning and net-tangible-benefit rules apply.

To qualify for an FHA Streamline:
  • The current mortgage must already be an FHA loan
  • The refinance must provide a “net tangible benefit” to the borrower
  • The borrower must meet FHA seasoning and payment history requirements
Many FHA Streamline transactions may require:
  • Income documentation depends on streamline type and lender requirements
  • An FHA appraisal is generally not required
  • Reduced documentation
  • Limited underwriting
  • Timelines vary by lender, loan purpose, documentation, property, appraisal, and title requirements.
FHA Streamline refinances are commonly used for:
  • Lowering interest rates
  • Reducing monthly payments
  • Transitioning from adjustable-rate to fixed-rate financing
  • Simplifying the refinance process
Additional FHA Streamline notes:
  • Meaningful cash-out is generally not permitted
  • Existing FHA loan required
  • Mortgage insurance still applies
  • UFMIP and annual MIP generally continue on the new FHA loan

FHA Cash-Out Refinance

An FHA Cash-Out Refinance allows qualified homeowners to refinance their current mortgage while accessing equity from their property in the form of cash. Unlike the FHA Streamline program, FHA Cash-Out refinancing involves full underwriting and qualification review.

FHA Cash-Out refinancing typically requires:
  • Income verification
  • Employment verification
  • A new appraisal
  • Full credit qualification and underwriting review
Commonly used for:
  • Debt consolidation
  • Home renovations or improvements
  • Paying off higher-interest obligations
  • Accessing home equity
  • Financial liquidity
  • Refinancing into a fixed-rate mortgage
Potential advantages may include:
  • Flexible FHA underwriting standards
  • Competitive financing options
  • Access to home equity
  • Higher DTI flexibility compared to some conventional programs
FHA Cash-Out loans still require:
  • UFMIP
  • Monthly MIP
  • Full qualification approval
  • Property appraisal and valuation review

FHA financing remains one of the most flexible and accessible mortgage solutions available for both homebuyers and homeowners seeking refinance opportunities.

FHA Loan Disclaimer

The information provided above is for general educational and informational purposes only and should not be interpreted as a commitment to lend, preapproval, underwriting approval, or financial advice. Loan programs, eligibility requirements, interest rates, debt-to-income ratios, mortgage insurance premiums, and financing terms may vary based on borrower qualifications, credit profile, occupancy, property type, loan amount, and applicable underwriting guidelines.

All mortgage loans are subject to credit approval, property approval, verification of income and assets, and investor or lender underwriting requirements. FHA financing has additional restrictions and qualification standards established by HUD/FHA.

FHA-insured loans require both an Upfront Mortgage Insurance Premium (UFMIP, currently 1.75% of the base loan amount) and an Annual Mortgage Insurance Premium (MIP, commonly around 0.55% annually for most standard FHA loans) paid monthly. UFMIP and MIP amounts, FHA county loan limits, debt-to-income guidelines, and program requirements are set by HUD/FHA and are subject to change without notice. Depending on the loan-to-value ratio and term, MIP may be required for the life of the loan.

WestFi is not affiliated with, acting on behalf of, or endorsed by the Federal Housing Administration (FHA), the U.S. Department of Housing and Urban Development (HUD), or any other government agency. The term “FHA” and any related marks are used for identification purposes only.

Interest rates, APRs, loan terms, and program availability are subject to change without notice and may not be available at the time of loan commitment or lock-in.

Equal Housing OpportunityWestFi is an Equal Housing Opportunity mortgage company. We fully comply with the Equal Credit Opportunity Act (ECOA), Fair Housing Act, and all applicable federal and state lending regulations. NMLS #2890320. For licensing information and consumer access, please visit NMLS Consumer Access.

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