Low down. Wider doors.

The flagship FHA product. 3.5% minimum down payment with a 580+ FICO; 10% minimum with 500–579. Down-payment funds can come entirely from gift money. DTI commonly approves up to 56.99% with strong compensating factors — far higher than standard conventional.

Insured by HUD via FHA. The federal insurance is what makes the lower credit and higher DTI possible — the lender's downside is covered if the borrower defaults, so the underwriting box is wider.

The price of admission is mortgage insurance: a 1.75% upfront premium financed into the loan, plus an annual MIP that runs 0.15%–0.75% per year depending on LTV, loan term, and base loan amount (rates were reduced 30 bps across the matrix effective March 20, 2023 per HUD Mortgagee Letter 2023-05). On <10%-down files, the annual MIP stays on for the life of the loan — the only way to remove it is to refinance into conventional.

For renovation projects involving structural changes, additions, foundation work, or any single repair item over $35,000. The purchase price plus renovation budget combine into one mortgage, qualified on the as-completed value. The borrower closes once and finances the entire project at FHA pricing.

A HUD-approved 203(k) consultant is required on every Standard 203(k). The consultant prepares the work write-up, oversees the contractor bidding process, signs off on draw inspections, and acts as a third-party intermediary between the borrower and the contractor. Construction must complete within 6 months, with one extension permitted.

Eligible property types: 1–4 unit primary residences, FHA-approved condos (interior work only), and certain conversions (e.g., a non-residential building converted to 1–4 unit residential). Investors are not eligible; FHA is owner-occupant-only.

A simplified 203(k) for cosmetic and minor repair work — kitchens, baths, paint, flooring, mechanicals, roofing, windows. No structural changes, no additions, no foundation work, and the total renovation budget cannot exceed $35,000 (including 10–20% contingency).

No HUD consultant required, fewer inspections, and a faster timeline. The borrower can do the work themselves only if they're a licensed tradesperson; otherwise, a licensed contractor handles the project.

This is the version used most often — buyers love it because it pays for the kitchen-and-bath update they want without forcing a 6-month structural rehab through underwriting.

For borrowers with a current FHA loan who want a lower rate or to drop from an ARM into a fixed. No new appraisal required (lender uses the original FHA loan balance/value), no income or employment documentation, and very little asset verification.

The new loan must show a "net tangible benefit" — typically a 0.5% combined rate-and-MIP reduction. The borrower must be current on the existing FHA loan with no late payments in the most recent 6 months and no more than one 30-day late in the prior 6 months.

UFMIP from the original loan can be partially refunded into the new file (decreases each month after closing the original loan), and the new UFMIP is reduced accordingly. Cash back to the borrower is capped at $500 — this is a rate-and-term refinance, not a cash-out.

A construction-to-permanent loan that closes once, before construction starts, at FHA-insured pricing and FHA's 96.5% LTV. Interest-only payments during the construction period; the loan modifies to a 30-year fixed automatically when the home is complete and the certificate of occupancy is issued.

Construction must finish within 11 months. The builder and project must be approved by the lender prior to clear-to-close. 5% of the construction cost is held by the lender as a contingency reserve. Manufactured homes are eligible (1-unit, non-jumbo). Existing-foundation reuse is not permitted on FHA OTC — appraisal cannot show anything beyond foundation completion at start.

Pre-started loans (builder/borrower started before loan submission) are not permitted on FHA OTC; that path is conventional-only. For FHA, construction must begin after loan submission.