For first-time homebuyers or borrowers with low credit scores or low income, mortgage rates are trending today.
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Why do FHA loans have lower interest rates?
Because they're insured by a federal agency, interest rates on government-backed mortgages like FHA loans are typically lower than down payment assistance, or the ability to apply with non-traditional credit (such as proof of on-time rent or utility payments) if you don't have a traditional credit score. Here are the best lenders for FHA loans in 2025 according to Business Insider editors.
Best overall FHA lender: New American Funding
580
3%
Conforming, jumbo, FHA, VA, USDA, reverse, buydown loan, I CAN mortgage,
- Variety of home loans, including a specialized buydown loan or I CAN loan
- Apply with non-traditional forms of credit if you have no credit score
- You may be able to get a mortgage with a score below 580 with compensating factors
- No home equity loan, HELOC, or construction loan
New American Funding is one of our top low credit score mortgage lenders. It's a strong mortgage lender overall, and its buydown loan and I CAN loan make it easy to customize a mortgage to your specific needs.
New American Funding FHA mortgage- Offers mortgages in every US state except Hawaii and New York
- Branches in 32 US states
- Minimum credit score and down payment displayed are for FHA mortgages. If your score is below 580, you'll need to put down at least 10%.
New American Funding is our top pick for FHA borrowers because it accepts applicants with lower scores and rocky credit histories on its FHA loans. You may be able to get an FHA loan from this lender with a score below 580 with compensating factors.
If you don't have a credit score, you can use non-traditional credit to apply with this lender. You may also still be able to get an FHA loan with New American Funding if you have recent negative credit events (such as a late payment) on your credit report.
What to look out for: New American Funding doesn't let you explore personalized New American Funding Mortgage Review
Best FHA lender for low credit scores: Carrington Mortgage Services
500
3%
Conforming, FHA, USDA, VA, Carrington Flexible Advantage
- Has multiple mortgage options for borrowers with low scores
- Carrington Flexible Advantage loan will consider borrowers who have recent credit events including bankruptcy, short sale, or late payments.
- Not available to residents of North Dakota or Massachusetts
- No home equity loans, HELOCs, reverse mortgages, or construction loans
- No personalized interest rates shown online
Carrington Mortgage Services is our top low credit score mortgage lender, thanks to its low minimum credit score requirements and willingness to work with those who have recent negative events on their credit reports.
Carrington Mortgage Services FHA mortgage- Offers mortgages in all US states except Massachusetts and North Dakota
- Minimum credit score and down payment displayed are for FHA mortgages. If your score is below 580, you'll need to put down at least 10%.
Carrington Mortgage Services is a good FHA lender for borrowers with low credit scores. It accepts scores as low as 500 on its FHA loans and has flexible requirements for borrowers with "less than perfect" credit.
Note that any time you get an FHA loan with a credit score below 580, you'll need to put at least 10% down, regardless of which lender you're working with.
What to look out for: Carrington doesn't lend in Massachusetts or North Dakota. It also doesn't show its rates online.
Carrington has a Carrington Mortgage Services Review
Best FHA lender for those with no credit history: Guild Mortgage
540
3%
Conforming, jumbo, FHA, USDA, VA, reverse, renovation, manufactured, bridge, energy-efficient, doctor, Complete Rate
- Apply with alternative credit data if you have no credit score
- Hybrid digital closing option means you'll have a faster closing appointment
- No home equity loan, HELOC, or construction loan
- Charges funding, underwriting, and wire transfer fees
- Sometimes charges origination fees
- Can't see mortgage rates online
Guild Mortgage is our favorite lender for first-time homebuyers, thanks to its flexible credit requirements and easy online process. It offers a huge range of mortgages, making it a good option for many types of borrowers.
Guild Mortgage FHA mortgage- Offers mortgages in every US state except New York and New Jersey
- Branches in 32 US states
- Minimum credit score and down payment displayed are for FHA mortgages. If your score is below 580, you'll need to put down at least 10%.
Guild Mortgage is an extremely affordable lender. It allows scores as low as 540 on its FHA loans and accepts non-traditional credit from borrowers who don't have a traditional score. Guild also offers zero down programs for its FHA loans that let you use a repayable or forgivable second loan to cover your down payment.
What to look out for: Guild doesn't display any rates online, making it difficult to get an idea of exactly how affordable this lender is. It also ranked below average in J.D. Power's 2024 satisfaction study. This lender isn't licensed in New York.
Best FHA lender for an easy online experience: Rocket Mortgage
580
3%
Conforming, jumbo, FHA, VA
- Quick, user-friendly online experience
- Terms as short as eight years
- Offers mortgages in all 50 US states and Washington, DC
- Can't speak to an employee face-to-face (although you can talk via live chat or over the phone)
- No USDA loan, home equity loan, HELOC, reverse mortgage, or construction loan
- Can't apply with non-traditional credit data (like utility bills)
Rocket Mortgage, formerly known as Quicken Loans, is a strong lender in general and our "best overall" pick for the best mortgage refinance lenders. It's a great option if you're comfortable applying online and have a good credit score.
Rocket Mortgage FHA mortgage- Offers homes loans in all 50 US states and Washington, DC, but there are no physical branches
- Minimum credit score and down payment displayed are for FHA mortgages.
Rocket Mortgage is a good option if you want a smooth online experience and prioritize customer support. It ranked high in customer satisfaction in J.D. Power's 2024 study and offers a simple online experience. But it doesn't accept non-traditional credit — you must have a traditional credit score of at least 580 to qualify
What to look out for: Rocket doesn't have any in-person branches.
Best FHA lender for home renovations: Fairway Independent Mortgage Corporation
580
3%
Conforming, jumbo, FHA, USDA, VA, reverse, renovation, refinance
- Has flexible credit requirements
- Option to close on your mortgage digitally instead of in person
- Available in all 50 US states
- Rates aren't posted online
Fairway Independent Mortgage is one of Personal Finance Insider's best online mortgage lenders. It's an overall affordable lender with a variety of mortgage options for borrowers to choose from
Fairway Mortgages- Available in all 50 US states
- Minimum credit score and down payment displayed are for FHA mortgages.
Fairway Independent Mortgage Corporation is a good option for borrowers looking to purchase a fixer-upper or those who prefer a remote closing experience. Fairway offers a few different FHA loan options, including limited or standard down payment of at least 3.5%
If you put down 10%, you may be able to qualify with a credit score as low as 500. You may also be able to get an FHA loan with a higher DTI if you have compensating factors, such as cash reserves. This means that you have money in your bank account to cover your monthly mortgage payments should you suddenly lose your source of income.
FHA loan benefits and drawbacks
Low down payment
Coming up with a loan-to-value ratio, and term length. With a minimum down payment on a 30-year mortgage that's less than $726,200, you'll pay 0.55% of the loan amount each year.
"Monthly mortgage insurance with FHA is generally more expensive than with a conventional loan because it is a fixed rate no matter your credit score," says Whitehead.
Mortgage calculator
Our free mortgage calculator can help you compare monthly costs based on your down payment, interest rate, and the purchase price of the home.
Mortgage Calculator
- Paying a 25% higher down payment would save you $8,916.08 on interest charges
- Lowering the interest rate by 1% would save you $51,562.03
- Paying an additional $500 each month would reduce the loan length by 146 months
FHA interest rates FAQs
Is FHA always 3.5% down?
A 3.5% down payment is the lowest an FHA loan will allow, but you can always put more down if you want to. If you have a score that's below 580, you'll need to put at least 10% down to qualify for an FHA loan.
What is an FHA loan interest rate right now?
FHA loan interest rates are lower than conventional mortgage rates right now, and have generally been hovering in the high 5% range recently.
How do I get an FHA loan?
To get an FHA loan, you'll need to apply for a mortgage with a lender that offers these mortgages.
Can I refinance an FHA loan?
Yes, you can refinance an FHA loan. If you're refinancing into another FHA loan, you may even be able to get a streamline refinance, which doesn't require an appraisal and may not require a credit check. Many borrowers refinance their FHA loans to conventional loans to remove mortgage insurance once they reach 20% equity.
Can I buy an investment property with an FHA loan?
You can only use an FHA loan to finance the purchase of a property you intend to live in as your primary residence. However, you may be able to buy a property with up to four units as long as you live in one of the units. Then, the other units can be rented out.
