Best FHA Loan Lenders of 2019

Top10.com StaffByTop10.com StaffAug. 15, 2019
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, which can save you a bundle.

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 Provider
Credit Score
Top Pro
Visit Site
500
Single form, compare lenders in minutes
500
Super easy online application
500
Accepts most borrowers
4. Better.com
620
No commission or origination fees
View Rates
5. NBKC
630
Excellent customer service ratings
View Rates

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

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.

Best for: FHA refinance without appraisal

Best perk: Speedy applications

Quicken Loans Quicken Loans View Rates

3. J.G Wentworth 

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

Minimum down payment: 3.5% based on qualifying credit

  • Useful reading materials on website
  • Submit all documents digitally
  • Experience with borrowers with low credit scores

J.G Wentworth issues home loans for every type of borrower, including FHA loans. Its website offers plenty of free educational resources, which can be particularly useful if you’re purchasing your first home and would like to learn more from your lender without committing to anything.

Like a number of lenders, J.G. Wentworth has streamlined its application process to allow applicants to fill out paperwork and submit documents online. An additional advantage to J.G. Wentworth is its experience with borrowers with low credit scores: in addition to FHA loans, this lender only requires the bare-minimum credit score of 620 for conventional mortgages.

Best for: FHA 203(K) loan for home renovations or improvements

Best perk: Digital document submission

J.G. Wentworth J.G. Wentworth View Rates

4. Better.com

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 an entirely digital mortgage platform that is designed to help users find loans based on their own specific needs. 

The entire online application process takes a matter of minutes, and users will receive a customized loan estimate, automatic discount finder, and personalize rate. They can also use the assistance of a dedicated non-commissioned loan office and an extensive online knowledge base.  

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

View Rates

5. NBKC

Minimum credit score: 630

Minimum down payment: 3.5%

  • Excellent customer service ratings 

  • Wide range of repayment terms, VA and FHA loans 

  • Transparent pricing

NBKC offers a wide range of mortgage loans including purchase and refinance, VA and FHA loans, among others.

You should expect a credit score requirement of around 620, so it's not the best option for people with bad credit. Nonetheless, NBKC gives you the option of completing your application online or on the phone, and you’ll have the services of a loan officer, just as if you went to a brick and mortar bank branch. 

You won’t face any obligatory lender fees, but the company does have rates that are fairly high compared to some competitors. 

View 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 Type
Standard 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 Type
High-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 Type
Special 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.

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.

Top10.com StaffByTop10.com StaffJun. 18, 2019
Our editorial staff is comprised of writers who are knowledgeable about financial services. We specialize in simplifying the process of choosing the right mortgage lender for your needs.