Best Lenders for FHA Loans in September 2024

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If you aren't sure if you can qualify for a mortgage because your credit isn't great, you might be able to buy a home with an FHA mortgage.

FHA mortgages are geared toward first-time homebuyers and those with poor credit or lower incomes. They also tend to have better interest rates than conforming loans.

But not all FHA lenders are the same, and FHA loan requirements and benefits can vary quite a bit from lender to lender. 

The Best Mortgage Lenders for FHA Loans

• New American Funding: Best overall
• Carrington Mortgage Services: Best for low credit scores
• Guild Mortgage: Best for those with no credit history
• Rocket Mortgage: Best for an easy online experience
• Fairway Independent Mortgage Corporation: Best for home renovations

Compare the Top FHA Lenders 

The best mortgage lenders with FHA loans accept low credit scores and offer additional benefits such as an easy online application, 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 2024 according to Business Insider editors.

Best Overall FHA Lender: New American Funding

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 mortgage rates without providing contact information. The lender ranked below average in J.D. Power's 2023 Mortgage Origination Satisfaction Study, which measures customer satisfaction. However, it does have good customer reviews on its Zillow lender profile.

New American Funding Mortgage Review

Best FHA Lender for Low Credit Scores: Carrington Mortgage Services

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 an NR, or "no rating" from the BBB because the lender is responding to previously closed complaints. Additionally, in November 2022, the Consumer Financial Protection Bureau ordered Carrington to pay $5.25 million in fines for supposedly violating borrowers' CARES Act rights. The CFPB claims that the lender misled borrowers seeking CARES Act forbearance and denied them key protections provided by the pandemic-era law.

Carrington Mortgage Services Review

Best FHA Lender for Those With No Credit History: Guild Mortgage

Guild Mortgage is an extremely affordable lender. It allows scores as low as 540 on its FHA loans and accept 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 2023 satisfaction study. This lender isn't licensed in New York.

Guild Mortgage Review

Best FHA Lender for an Easy Online Experience: Rocket Mortgage

Rocket Mortgage is a good option if you want a smooth online experience and prioritize customer support. It was ranked as the No. 2 lender for customer satisfaction in J.D. Power's 2023 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.

Rocket Mortgage Review

Best FHA Lender for Home Renovations: Fairway Independent Mortgage Corporation

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 FHA 203(k) loans, which can be used to finance renovation or repair costs into your mortgage. It was also the No. 1 lender in J.D. Power's latest origination satisfaction study.

What to look out for: Fairway doesn't show sample rates online.

Fairway Independent Mortgage Corporation Review

What Makes FHA Loans Different (And Why It Matters)

Backed by the Federal Housing Administration

FHA loans are insured by the Federal Housing Administration, which is a part of the U.S. Department of Housing and Urban Development. This federal backing makes FHA loans less risky for lenders to originate, since the FHA will cover the lender's losses if a borrower defaults on their loan. 

Borrowers pay for this insurance both up front and as part of their monthly mortgage payments. Your upfront mortgage insurance premium will be equal to 1.75% of the loan amount. You can pay this cost at closing or finance it into your mortgage. You'll pay your annual premium in equal parts in each of your mortgage payments. The annual premium rate is based on your loan term, loan amount, and the size of your down payment, and it ranges from 0.15% to 0.75% of the loan amount.

Lower Credit Score Requirements

FHA borrowers can get a mortgage with a credit score down to 580 with a 3.5% down payment or 500 with a 10% down payment. This is lower than what many other types of mortgages require.

Lower Down Payment Options

You can make a down payment of just 3.5% on an FHA loan.

Lender Overlays

As you search for an FHA lender, keep in mind that some lenders have more strict credit requirements than the minimums set by the FHA. These are called overlays. For example, some lenders will require a minimum credit score of 620 on their FHA loans. 

Key Factors to Consider When Choosing an FHA Lender

FHA Expertise

FHA loans are a very popular type of mortgage, so you shouldn't have a problem finding a lender that offers them. But you should also ask if your loan officer has a lot of experience with these loans, since they do have some intricacies that set them apart from conventional mortgages.

Competitive Rates and Fees

Mortgage lenders all charge different mortgage rates and fees, so you'll want to shop around to make sure you're getting the best deal available.

Whatever lenders you're considering, be sure to get approved with at least two or three different companies so you can compare offers.

Eligibility Requirements

Because of lender overlays, different lenders can have their own, stricter requirements for who they'll lend to. Before you apply with a lender, do some research to see what their minimum credit score requirements are. 

If you have a low credit score, you'll need to find a lender that will work with you. The FHA will back loans with scores as low as 500, but many lenders won't work with borrowers who have a score this low.

If you don't have a credit score, you'll want to work with a lender that will let you apply using non-traditional credit, such as rent payment history. Guild Mortgage, for example, offers this ability.

Customer Service

You should also look at reviews from previous borrowers to get an idea of how strong their customer service is. This is particularly important if you're buying a home (as opposed to refinancing), since you'll need to work with professionals who can ensure the process moves along smoothly so you close on time. 

First-Time Homebuyer Programs

Lenders are increasingly offering things like down payment assistance to help first-time buyers get into a home. If you're interested in getting assistance, ask lenders if they have any programs that could help make homeownership more affordable.

You can also check out Business Insider's guide to the best mortgage lenders for first-time buyers to see which lenders have affordable mortgages and down payment or closing cost assistance for first-timers. 

Where to Find the Top FHA Lenders

FHA-Approved Lenders

You can search on HUD's website for lenders that offer FHA loans in your area. 

Banks and Credit Unions

If you like your current bank or credit union, you might want to see if they offer FHA loans and if it's worth getting your mortgage with them. If you want to explore your options, get quotes from both local and national banks or credit unions to see who can offer you the best deal on a mortgage.

Online Lenders

Many lenders now offer online applications and other digital services, but some mortgage lenders (like Rocket Mortgage, for example) operate solely online. These lenders can sometimes offer a better deal since they have fewer operational costs because they have no in person branches. But this isn't always the case, so be sure to shop around.

Mortgage Brokers

A mortgage broker will show you offers from a variety of different mortgage lenders and help you find the best deal. If you don't want to do the work of comparing a bunch of lenders and going through multiple approval processes, you might like working with a broker.

Best Lenders for FHA Loans FAQs

Why You Should Trust Us: Experts' Advice on Choosing an FHA Mortgage Lender

Insider

Our experts have provided advice about how to know whether you should get an FHA loan or another type of mortgage.

• Anthony Park, author of "How to Buy Your Perfect First Home"
• Lauryn Williams, certified financial planner, founder of Worth Winning Financial Planning
• Julie Aragon, mortgage broker, founder of Aragon Lending Team
• Molly Grace, mortgage reporter at Business Insider

Here's what they had to say. (Some text may be lightly edited for clarity.)

What factors should someone take into consideration when choosing a mortgage lender?

Anthony Park, author:

"The canned answer is to just go with the lowest rate. However, you also want to take into account who's going to serve your loan best. Are repayments going to be easy for you? Who is most likely to be able to help you if you need to take out a HELOC or refinance later, versus somebody who's more of a one-off type?

"They may have the lowest rates to get you involved, but they might have very, very little hand holding after the fact. I wouldn't recommend paying an exorbitant amount more for potential services in the future, but just don't always necessarily go with the rock-bottom lowest rate. There's sometimes a cost with that."

Molly Grace, Business Insider:

"Remember that you're not just choosing a mortgage lender — you're also building a homebuying team. To snag the home you want in this competitive market, you need a lender that can move quickly and has good communication with you and your real estate agent.

When I was looking for a house, I was able to text my loan officer (whom my real estate agent recommended) and get quick replies when I had questions or needed an updated preapproval letter for an offer. As you compare lenders, pay attention to how responsive they are, and ask your agent if they have any experience with the lenders you're considering."

How can someone decide between a conventional mortgage vs. a government-backed mortgage, like an FHA loan?

Molly Grace, Business Insider

"An FHA mortgage is a really helpful option for borrowers with low scores or kind of rocky credit histories. But if you have great credit, you may get a better rate and pay less for mortgage insurance on a conventional mortgage. 

VA mortgages are really great deals. If you qualify for one, you should definitely go for it. You get zero down with no mortgage insurance — plus some of the best rates available."

Julie Aragon, Aragon Lending Team:

"The most common government loan that's widely available to almost everyone is the FHA loan. There's a couple of reasons why somebody would go with FHA instead of conventional one. Their credit is a little on the crummy side, let's say below 700. You can get conventional with down to a 620 score, but the mortgage insurance gets really expensive. FHA doesn't discriminate — no matter how perfect or crappy your credit is, the mortgage insurance is the same."

How can someone know whether they're financially ready to buy a home?

Lauryn Williams, CFP:

"You should have funds left over after everything is said and done as it pertains to purchasing the home. So if you don't have an emergency fund plus a down payment, you're probably not ready to purchase a home. Another thing I think about is credit card debt. While you can be approved for a mortgage with credit card debt and student loans and very little cash on hand, you put yourself in a very risky situation."

Molly Grace, Business Insider

"You have to be ready to dedicate a chunk of your budget to homeownership — and I don't mean your mortgage payment. When you own your house, there's always something that needs taking care of, especially in the first year. We got to our new house on moving day to find that the A/C was out. We paid $700 to have it fixed."

Methodology: How We Chose the Best FHA Lenders

To choose the top FHA loan lenders, we looked at three main factors:

• Credit score. FHA loans' main appeal is that you don't need a great credit score to qualify. While the official FHA guidelines allow for scores as low as 580 (or 500 with a 10% down payment), some lenders have higher minimum credit score requirements, which can make it difficult for some borrowers to qualify. All of the FHA lenders on our list allow scores of 580, and many will allow even lower scores with a higher down payment. Most of our lenders also have some form of flexible credit guidelines, such as letting borrowers apply with non-traditional credit or allowing borrowers to have recent negative events on their credit reports.
• Customer satisfaction. Working with a lender that prioritizes customer satisfaction is vital, particularly if you're buying a home since you'll be working on a deadline. If the lender appeared in the J.D. Power 2023 Mortgage Origination Satisfaction Study, we looked at its ranking. If it wasn't in the survey, then we read online customer reviews.
• Ethics. Most of our top picks received an A+ from the Better Business Bureau, which measures companies' trustworthiness. The only exceptions are New American Funding, which has an A rating, and Carrington, which currently has an NR ("no rating"). We also researched and considered any scandals in the past three years.

Molly Grace

Mortgage Reporter

Molly Grace is a mortgage reporter for Business Insider with over six years of experience writing about mortgages and homeownership. ExperienceIn addition to her daily mortgage rate coverage, Molly also writes mortgage lender reviews and educational articles on homebuying and analyzes data and economic trends to give readers actionable and up-to-date information about the housing market.She also tracks affordable mortgage and down payment assistance programs offered throughout the country to keep her readers informed of homebuyer programs available to them. Before Business Insider, Molly was a blog writer for Rocket Companies and helped to create Rocket Mortgage’s Shorty Award-winning podcast Home. Made.Molly is passionate about covering personal finance topics with empathy. Her goal is to make homebuying knowledge more accessible, especially for groups that may think homeownership is out of reach. ExpertiseMolly is an expert in the following topics:

• Mortgages and mortgage lenders
• Home equity
• The housing market
• The economy and the forces that impact mortgage rates
• Budgeting and saving
• Credit
• Insurance
• Retirement savings

EducationMolly earned a bachelor's degree in journalism from Indiana University. She is based in Michigan and has a dog and two cats. 

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Elias Shaya

Compliance Associate

Elias Shaya is a Compliance Associate on the Personal Finance Insider team based in New York City, which ensures content accuracy and editorial independence so readers are always getting up-to-date and objective financial advice.The team also works to minimize risk for partners by ensuring language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up-to-date and accurate.He joined Insider in February 2022 as a fellow on the compliance team.

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