Home prices have risen significantly in recent years, so it’s no surprise that more borrowers are struggling to afford the monthly mortgage payment that would accompany a new home.
Fortunately, you won’t need much for a down payment on an FHA loan. A down payment of 3.5% is all that’s required. These loans are also more flexible on credit requirements, which can be helpful if you have a lower credit score.
FHA mortgages are insured by the Federal Housing Administration, but loan applications will have to go through FHA-approved lenders. The good news is that many companies do offer FHA loans as an option. However, given the popularity of this type of loan, it can be difficult to figure out which FHA lender is good for you.
No matter what you do, it’s important to shop rates with different lenders by getting a loan estimate from each company. A study by the Consumer Financial Protections Bureau showed that two similarly qualified borrowers can see a difference of 0.5% in the mortgage rates they receive. Over the life of the loan, this can end up being a difference of tens of thousands of dollars.
Here are our picks for the best FHA loan lenders.
As with all of our mortgage lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.
Best FHA Lenders
- Guaranteed Rate’s Standout Feature::Guaranteed Rate says it can provide a preapproval letter in around 15 minutes, and the company goal is to be clear to close within 10 days.
- More than 400 branch locations nationwide
- Operates in all 50 states and Washington, D.C.
- Fully online mortgage application process
- Detailed advertised rates for many of its loan products
- Online preapproval 15 minutes
- Fast closings
- Lenders fees not available online
- Some loan types are brokered off to other lenders
Guaranteed Rate is a Chicago-headquartered firm with a strong online presence and 400 branch locations across the country. We ranked the company a top lender because of its top-of-the-line digital experience, helpful consumer tools, solid customer service, and variety of loan products, including all three government loans.
Guaranteed rate received fewer consumer complaints compared to most other lenders we reviewed. The company logged less than one complaint per 1,000 loans originated with the Consumer Financial Protection Bureau (CFPB) consumer complaint database, the agency responsible for collecting, monitoring, and responding to U.S. consumer complaints about financial services and products.
- Rocket Mortgage’s Standout Feature:Despite its magnitude, the company has lower-than-average consumer complaints registered on the CFPB consumer complaint database.
- Quick and easy preapproval process
- Entirely remote application and approval process
- Lends in 50 states
- Wide range of loan options
- Strong customer service reputation
- No physical locations
- You’ll need to call or chat with a representative for some loan information
- No construction loans or renovation loans
- Advertised rates may include discount points, which increase your upfront costs
- Difficult to find mortgage menu of loans
Rocket mortgage is the online lender for Quicken Loans and is one of the largest mortgage lenders in the U.S. We ranked the Detroit-based company as one of the best mortgage lenders because of its simple online application process, low level of consumer complaints, the transparency and accessibility of its rates and fees, and the company’s wide offering of mortgage loan products.
Rocket Mortgage stands out for the company’s high level of customer satisfaction. Rocket Mortgage originated over one million loans in 2020, making it the largest lender we reviewed by total volume. We found 0.48 complaints per 1,000 loans — or less than half a complaint per 1,000 loans occurred. This figure is very low compared to the average complaint ratio of 2 complaints per 1,000 loans among other lenders we reviewed.
- Veterans United Standout Feature:Veterans United provides a wealth of information on its website regarding what to expect through the loan process, closing, how to prepare for homeownership, home loans basics, credit, and underwriting.
- Mortgage loans available in all 50 states
- Educational content available through the company’s website
- Highly experienced in VA loans as a top three VA loan originator for five consecutive years
- Low number of consumer complaints with the CFPB
- Offers a number of loan programs including VA, jumbo, conventional, FHA, and USDA
- Full online application process
- Limited online rate information; must call to see other rate options such as discount points
- Difficult to find information regarding non-VA loan options
- Does not offer home equity loans or lines of credit
Veterans United Home Loans, headquartered in Missouri, is a mortgage lender that specializes in VA home loans in all 50 states. Veterans United is incredibly active in the VA loan space. The U.S. the Department of Veterans Affairs has listed Veterans United in the top three among VA loan lenders by volume for five consecutive years. While the company focuses heavily on VA loans, it also offers conventional, jumbo, FHA, and USDA loans.
Veterans United has a fully digitized and easy online application process. Compared to other lenders we’ve reviewed, the company had one of the lowest complaint ratios logged with the CFPB: less than half of one complaint per 1,000 loans originated.
- NASB’s Standout Feature:NASB has several programs that can help non-traditional borrowers get a home such as the self-employed and those with a less-than-prefect credit history.
- Lends in 50 states
- Has unique loans products for borrowers with credit issues or are self-employed
- Advertises daily interest rates for purchase and refinance loans
- Can get lower rate if rate drops during 90-day rate lock period
- Streamlined online application process
- Can get customized rate quote without hard credit check
- 12 in-person branches, but only in Missouri
- Does not offer USDA loans, construction loans, renovation loans, and home equity products
- Higher credit score standards on FHA and VA loans
Headquartered in Kansas City, Missouri, North American Savings Bank (NASB) is a full-service bank that lends in all 50 states. North American Savings Bank has a more extensive mortgage menu than most, including options for veterans, first-time homebuyers, self-employed people, and borrowers with less-than-perfect credit histories. That’s because the bank offers VA loans, FHA loans, and mortgages for people who don’t fit conforming loan standards. NASB also has a streamlined online application process with transparent pricing for browsing borrowers.
- Truist Bank’s Standout Feature:There is an allure of convenience to also have your mortgage through the same institution you bank with
- Offers a full lineup of the major mortgage programs
- Advertises sample mortgage rates on both the SunTrust and BB&T websites
- Mortgages available in 47 states and Washington, D.C.
- Can submit an application online, by phone, or in person
- Gathering mortgage product information is slightly confusing because of the merger
- Mortgages not available in Hawaii, Alaska, or Arizona
Truist Bank, now merged with Suntrust and BB&T under its name, has an extensive footprint across the U.S. through its thousands of brick-and-mortar branches and online presence. Along with the company’s solid menu of mortgage products, easy-to-use online application process, transparency of rate and fee information, and average number of complaints compared to other reviewed lenders, the brand’s website is easy to navigate with several useful resources to help with the borrowing process, such as calculators, videos, and sample mortgages.
Truist offers a comprehensive menu of online or in-person banking accounts such as checking, savings, money market, and CDs. If you are in the market for a bank, looking to switch banks, or already have a Truist account, there is an allure of convenience to also have your mortgage through the same institution. Some lending institutions also give incentives or discounts to existing account holders.
- Sebonic Financial’s Standout Feature:Sebonic’s proprietary borrowing platform, Octane. We found Octane to be one of the best online application processes
- Offers a streamlined digital application and closing process
- Funds conventional loans, jumbo loans, and all three government-backed loan programs
- Available in all 50 states and Washington, D.C.
- Interest-only jumbo ARMs available
- Mortgage rates aren’t published on the lender’s website
- Doesn’t offer home equity loans, HELOCs, renovation loans, reverse mortgages, or construction loans
- In-person branches only available in Charlotte, North Carolina; Gaithersburg, Maryland; and Las Vegas, Nevada
Sebonic Financial is the mortgage lender division of North Carolina-headquartered Cardinal Financial. Sebonic Financial scored well with NextAdvisor because of the company’s high-end digital borrowing experience, full mortgage product lineup which is available in all 50 states, and the lender’s history of below-average customer complaints with the CFPB. Based on 2020 data, Sebonic has less than one complaint per 1,000 loans originated in the same year.
Although Sebonic’s mortgage rates and fees are not listed on the company website, the online system, Octane, makes it easy to access a quote without a credit check or drawn-out process. With Octane, borrowers can get a fast rate quote, start an application, upload documents, and sign closing documents, with real-time updates along the way. We found Octane to be one of the best online application processes compared to other lenders we’ve reviewed. It’s easy-to-use, high-tech, and we appreciate the ability to have a full-online digital experience with the option to speak to loan officers.
- Pennymac’s Standout Feature:Very low complaint history and best overall online user experience with price transparency and user-friendly application process
- Advertises daily interest rates for purchases and refinances
- Customized rate quote available online
- User-friendly online experience
- Available in 49 states (not available in New York)
- Maintains 16 branch locations spread across nine states
- Doesn’t offer home equity products, jumbo mortgages, reverse mortgages, construction loans, and renovation loans
- Doesn’t share information about minimum qualification requirements on its website
Pennymac Loan Services isn’t a well-known name. But the California-based mortgage lender stands out for its convenient online application process, ability to get a rate quote without a credit check, transparency of rates and fees, and low frequency of consumer complaints with the CFPB. In 2020, the CFPB reported less than 0.30 complaints per 1,000 loans. Pennymac offers most major mortgage products and all three-government loans in 49 states, with 16 brick-and-mortar branch locations.
The brand had one of the lowest complaint ratios among lenders we reviewed, but the more noticeable standout feature is the overall online experience. At NextAdvisor, we value price transparency and accessibility. Pennymac met this expectation with daily rate and fee updates and customizable rate quotes on its user-friendly webpage.
- Watermark Home Loan’s Standout Feature:The “Non-QM loan,” or “Non-Qualified Mortgage” for the non-traditional borrowers, such as the self-employed, a history of bankruptcy, or with less attractive debt-to-income ratios.
- Solid mortgage menu of products including all three government loans
- Unique loan product for the non-traditional self-employed borrower
- Calculators and tools very helpful
- Easy digital application process
- Low level of consumer complaints
- Only originates mortgages in 38 states (more states coming soon)
- A breakdown of lender closing fees is not provided with rate quote
Watermark Home Loans based out of Irvine, CA, and currently licensed in 38 states. The company is named one of NextAdvisor’s best mortgage lenders of 2022 because of its streamlined online application process, extensive loan product menu including standard conventional, jumbo, and refinance loans, but also all three government-backed loans (FHA, VA, and USDA). Another stand out product by Watermark is its “non-qualified mortgage” meant to serve borrowers with unique income criteria, such as the self-employed.
Watermark has a fully digital online application process with document uploading capabilities. The company also offers an online notary service so you can opt to complete closing paperwork all online versus in person.
Borrowers can receive a customized rate quote by filling out a form online with basic information and then will get an email with a few different quote options to review that lays out clearly discount points, lender credits, or closing costs options. Watermark Home Loans advertises national daily rate averages along with data indicators of how much each loan type’s rate has moved up or down in the last 30 days.
Watermark has a lower-than-average number of consumer complaints: Less than one complaint per 1,000 originated loans in 2020, according to the CFPB’s consumer complaint database.
- LenderFi’s Standout Feature:Out side of third-party closing fees, LenderFi advertises no additional lender fees as part of the closing costs.
- Rate quotes can be obtained online without a credit check
- Quick and easy to reach a loan representative by phone
- Very friendly customer service
- Does not charge lender fees
- Super transparent pricing
- Short list of loan types: No VA, USDA, or home equity loans
- Loans are not offered in all 50 states
- Company’s website has minimal educational content
Headquartered in Calabasas, CA, LenderFi is named one of NextAdvisor’s best lenders because of the company’s easy-to-use online application process. LenderFi provides a unique feature to its rate quotes: A full, transparent, line-by-line breakdown of all rates and fees before even getting a credit check. Discount points are clearly advertised with how they affect the APR and monthly payment. The quote even estimates homeowners insurance, mortgage insurance (if applicable), property tax costs, and all third-party closing fees.
The company advertises that it does not charge lender fees as part of the closing costs. Third-party closing fees, such as appraisal, title insurance, and inspection costs still apply. But LenderFi says no additional lender costs are passed to the borrowers. Instead, all lender-related costs are rolled into the quoted rate and APR.
- Costco Mortgage Program Standout Feature:Costco members have access to a network of lenders in one marketplace, one credit check, and potential discounts and incentives for borrowing through this platform.
- Costco members get discounts on lender fees
- Applicants can compare loans from several lenders
- The mortgage application process is quick and automated
- Fee discounts are only available to Costco members
- Not a direct lender, but a marketplace program
The Costco mortgage program does not originate mortgages, so it was not included in the list of best mortgage lenders. However, the useful marketplace is worth an honorable mention. Costco members have access to a network of participating mortgage lenders offering discounts and incentives for borrowing through this channel. Through the Costco mortgage marketplace website, you can fill out a universal application, compare loan offers, and cash-in on discounts or lender fees if you choose a lender through this program. The marketplace platform is easy to navigate with transparent pricing and terms. You can get a rate quote online in minutes and will only be contacted by the lender with your expressed permission.
What to Look for in an FHA Loan Lender
Buyers should look for a lender based on their competence and quality of service, not just the rates they provide, says Karim Wahba, broker and team leader at Wahba Group Real Estate. “As a buyer, you want to make sure that the lender is experienced in the type of loan you are getting and will keep an open line of communication with you.”
Buyers who pick a lender primarily based on rates often regret it because of subpar service, Wahba says. You don’t want to be in a position where your deposit is in escrow and you can’t reach your lender. A good lender will advise you on when to lock the rate, what loan programs work best, and how best to position your file to underwriters.
FHA Loan Requirements
You’ll have to meet certain criteria to be eligible for an FHA loan. This includes your credit, income, down payment, and the property itself. While there are too many requirements to list (the handbook detailing them totals over 1,500 pages), here are several you should be aware of:
- A down payment of at least 3.5%
- A minimum credit score of 580 (500 is acceptable with a 10% down payment)
- The home must meet FHA standards
- You must intend on using the home as your primary residence
What Are FHA Loan Limits?
Your loan amount could be impacted by the FHA loan limit for a specific area. FHA loan limits are determined by things like the median sales price, average income, and the type of property you’re purchasing. For example, if you are purchasing a 1-unit home in a low cost of living area, the loan limit could be as low as $472,030 for 2023. In a high cost of living area, the loan limit can go as high as $1,089,300.
Is it Hard to Get Approved for an FHA Loan?
For many individuals, it can be easier to qualify for an FHA loan due to the low down payment, and more flexible credit requirements. If you don’t qualify for a conventional loan or jumbo loan because of some blemishes on your credit report, an FHA loan is worth considering.
FHA home loans require a minimum down payment of just 3.5% and a credit score of 580. If you can manage a 10% down payment, however, the minimum credit score requirement drops to 500.
What Credit Score Do I Need for an FHA Loan?
The minimum credit score needed to be eligible for an FHA mortgage loan depends on your down payment amount. With the minimum 3.5% down payment, you can qualify with a credit score of 580. However, if you are able to commit to a 10% down payment, the minimum credit score drops to 500.
How We Chose the Best FHA Mortgage Lenders
To find the best FHA mortgage lenders of 2022, we first looked at all the mortgage lenders NextAdvisor has reviewed so far. To come up with the best mortgage lenders, we use criteria to develop a framework using a weighted average score between 0 and 5 with more weight awarded to the criteria we determined to be the most important. We then selected the top lenders who offer FHA loans.
Our list doesn’t take into account key financial factors like mortgage rates, APRs, and fees, because those depend on market conditions and your individual creditworthiness. Instead of focusing on those numbers, it’s best to first determine the qualities you want in a lender and how to find the best mortgage rates. Then you’ll be prepared to find the best lender for you.
The factors we used to evaluate the best mortgage lenders:
- Online Convenience: A lender is scored 1 through 5 based on the company’s online application experience. A 5 is awarded if the company’s mortgage application can be completed fully online with a streamlined process, including uploading documents and a customized rate quote. A lower score is awarded if additional phone calls are needed to process an application or for a poor online user experience.
- Transparency: Lenders are scored 0 through 5 based on the accessibility and transparency of mortgage rates, lender fees, and credit check requirements for rates and/or fees. A 5 is awarded if the lender advertises rates and fees on its websites and doesn’t require a hard credit check to get rates and/or fees. Conversely, a lower score is awarded when consumers cannot easily access rate and fee information and/or must go through a hard credit check to access them.
- Nationwide Availability: Lenders are scored 1 through 5 based on the company’s geographical footprint. A lender can score a 5 if it operates in all 50 U.S. States.
- Loan Product Variety: Lenders are scored 1 through 5 based on their loan product menu and variety of products offered. A high score of 5 is given if most or all mortgage products are available, with a lower score awarded for a limited mortgage menu.
- Customer Satisfaction: To measure customer satisfaction, we reviewed the number of complaints filed against each lender with the Consumer Financial Protection Bureau in 2020. We divided the total consumer complaints with the total number of loans originated over the same time period to get a complaint ratio per 1,000 loans originated. We sourced the total loans originated using publicly accessible data provided under the Home Mortgage Disclosure Act and regulated by the Federal Financial Institutions Examination Council (FFIEC).
Frequently Asked Questions (FAQ):
Who is the best FHA lender?
The best FHA mortgage lender will be different for everyone, as it will depend on your own personal circumstances and what you need from a lender. Some of the best FHA mortgage lenders can offer one or a combination of competitive FHA loan rates and fees, long customer service hours, knowledgeable loan officers, an online-only platform to conduct business or physical branch locations you can visit.
Which mortgage lender has the cheapest FHA loans?
The cheapest FHA loan will be determined by two main items: the interest rate for the loan, and fees charged. Some lenders will offer lower interest rates, but have additional closing costs or higher origination fees, so it might sometimes be more beneficial to take a higher interest rate if the fees are low enough. You can use a mortgage calculator to determine the cost of a loan, and whether you’ll save more money by taking a higher or lower interest rate.