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11 Best Lenders for FHA Loans in May 2020

NerdWalletFebruary 23, 2020

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FHA loans in 2020 offer several benefits including low rates and low down payments. If you're interested in an FHA loan, we'll help you choose the right lender for you. Compare some of the best FHA lenders across several categories.

NOTE: Due to the coronavirus outbreak, obtaining a mortgage may be a bit of a challenge. Lenders are dealing with demand and staffing issues. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.

You might think all Federal Housing Administration lenders are the same. But even when you’re looking for an FHA loan, it’s always smart to shop at least three lenders. Their mortgage rates, fees and other costs to borrow can vary substantially. Remember, the lender you choose will affect how fast you can close, how much you pay and, ultimately, whether you can buy the home you want.

» MORE: How to find the best FHA mortgage lenders

NerdWallet has picked some of the best FHA lenders in a variety of categories so you can quickly determine which one is right for you.

» MORE:  Compare FHA mortgage rates

Summary of Best Lenders for FHA Loans in May 2020

LenderNerdWallet Rating Minimum Credit Score Minimum Down PaymentLearn More

Fairway Independent Mortgage

at Fairway

Best for: FHA overall

640

3%

at Fairway

New American Funding

at New American

Best for: nontraditional credit histories

640

3%

at New American

Quicken Loans

at Quicken Loans

Best for: customer service

580

3%

at Quicken Loans

Veterans United

at Veterans United

Best for: low down payment

660

0%

at Veterans United

Rocket Mortgage

at Rocket Mortgage

Best for: online experience

580

3%

at Rocket Mortgage

Vylla

Best for: nontraditional credit histories

500

3%

Read review

PrimeLending

Best for: FHA refinance

580

3%

Read review

Guild Mortgage

Best for: online experience

580

3%

Read review

Citibank

Best for: first-time home buyers

N/A

3%

Read review

Flagstar

Best for: first-time home buyers

580

3%

Read review

Bank of America

Best for: low down payment

600

3%

Read review
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at Fairway

Fairway Independent Mortgage: NMLS#2289

Logo

Min. Credit Score

640

Min. Down Payment

3%

at Fairway


Why we like it

Ideal for borrowers who want lots of options and a quick turn time. Fairway Independent Mortgage offers a full selection of home loans along with a comprehensive mobile app for a fast and easy application process.

Pros

  • A robust suite of loan products.

  • Licensed in all 50 states.

  • Close in as little as 10 days using the Fairway app.

Cons

  • Limited branch locations.

  • Mortgage rates not posted on website.

Read Full Review
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at New American

New American Funding: NMLS#6606

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Min. Credit Score

640

Min. Down Payment

3%

National / Regional

National

at New American


Why we like it

Ideal for home buyers and refinancers who want an FHA mortgage and need to be evaluated using nontraditional credit criteria.

Pros

  • Uses manual underwriting to evaluate creditworthiness.

  • Offers full online mortgage application, rate quotes, document upload and loan tracking.

  • Home equity lending sets it apart from most non-bank lenders.

Cons

  • Services not available in all 50 states.

Read Full Review
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at Quicken Loans

Quicken Loans: NMLS#3030

Logo

Min. Credit Score

580

Min. Down Payment

3%

at Quicken Loans


Why we like it

Ideal for FHA borrowers who like online convenience. Quicken is the largest FHA lender in the nation and a mortgage-technology leader.

Pros

  • Quicken Loans couples a fully online application with available mortgage advisors for those who want a human touch.

  • Instantly verifies employment and income for more than 60% of working Americans.

  • Offers custom fixed-rate loan terms that are between eight and 30 years.

  • Provides FHA-backed loans, USDA loans as well as products offered by Freddie Mac and Fannie Mae that require down payments as low as 3%.

Cons

  • Quicken Loans doesn't offer home equity loans or HELOCs.

  • If you’re a “look me in the eye” type of customer, you’re out of luck.

  • Doesn’t consider alternative credit data. It just looks at credit scores and debt-to-income ratios, the way most mortgage lenders always have.

Read Full Review
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at Veterans United

Veterans United: NMLS#1907

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Min. Credit Score

660

Min. Down Payment

0%

at Veterans United


Why we like it

Ideal for military personnel and their families. FHA mortgages from Navy Federal Credit Union include alternative credit scoring so it's easier for first-time borrowers to obtain a home loan.

Pros

  • Also offers FHA, USDA and conventional loans.

  • Offers 24/7 customer service.

  • You can complete a loan application and pre-qualify online.

  • Registers a low volume of complaints filed with the Consumer Financial Protection Bureau.

  • Offers free credit score education and assistance.

  • Provides a client advocate team staffed by former senior enlisted leaders from each branch of the armed forces.

Cons

  • Doesn’t offer home equity loans or HELOCs.

  • Loans are available in all 50 states, but Veterans United has offices in only about half.

Read Full Review
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at Rocket Mortgage

Rocket Mortgage: NMLS#3030

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Min. Credit Score

580

Min. Down Payment

3%

at Rocket Mortgage


Why we like it

Ideal for anyone who appreciates smartphone app service, support and time savings. Rocket Mortgage offers a fully digital home loan experience with a large variety of mortgage products.

Pros

  • The site caters to self-service users who want to apply for a home loan without talking to a human unless it’s absolutely necessary.

  • With your authorization, accesses asset statements from 98% of U.S. financial institutions.

  • Tells you the loan amount you’ll qualify for within minutes.

  • Rocket Mortgage’s document and asset retrieval capabilities can save you a bunch of time and hassle.

Cons

  • Doesn't offer home equity loans or HELOCs.

  • If you’re a “look me in the eye” type of customer, you’re out of luck.

  • Doesn’t consider alternative credit data. It just looks at credit scores and debt-to-income ratios, the way most mortgage lenders always have.

Read Full Review

Vylla: NMLS#2600

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Min. Credit Score

500

Min. Down Payment

3%


Why we like it

Ideal for first-time home buyers or credit-challenged borrowers who may have trouble qualifying for a mortgage.

Pros

  • Low minimum credit score.

  • Online application, loan tracking and document upload.

  • Free rate locks.

Cons

  • No online preapproval.

  • No presence in Massachusetts or North Dakota.

Read Full Review

PrimeLending: NMLS#13649

Logo

Min. Credit Score

580

Min. Down Payment

3%


Why we like it

Ideal for borrowers with past credit issues and those looking for down payment and closing cost assistance programs.

Pros

  • Low rate of consumer complaints filed with the Consumer Financial Protection Bureau.

  • Offers a "float-down" interest rate lock.

  • Offers a proprietary closing-cost assistance program.

Cons

  • No online mortgage rates.

  • Charges an origination fee.

  • Doesn't offer home equity products.

Read Full Review

Guild Mortgage: NMLS#3274

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Min. Credit Score

580

Min. Down Payment

3%


Why we like it

Ideal for borrowers with a relatively high credit score who may need down payment assistance or help from a state housing agency.

Pros

  • Works with loan programs offered by state and local housing agencies.

  • Specializes in mortgages for first-time home buyers.

  • Almost half of its loans are low-down-payment government mortgages.

  • Considers alternative credit, such as history of payments on rent and utilities.

Cons

  • With a concentration of offices in the West and South, Guild has little presence in the Northeast and Midwest.

  • Jumbo borrowers may find that banks are more competitive when it comes to large loan amounts.

Read Full Review

Citibank: NMLS#412915

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National / Regional

National

Min. Down Payment

3%


Why we like it

Ideal for borrowers with nontraditional credit. FHA mortgages from CitiMortgage feature low down payment options and flexible financial requirements so it's easier for first-time borrowers to obtain a home loan.

Pros

  • Low down payment options.

  • Discounts for Citibank customers.

  • Looks at alternative credit data like rent history and child support payments.

  • Available in all 50 states.

Cons

  • Charges a mortgage application fee.

  • Did not disclose origination fees, which may vary.

  • Can't complete loan online.

Read Full Review

Flagstar: NMLS#417490

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Min. Credit Score

580

Min. Down Payment

3%


Why we like it

Ideal for FHA borrowers who appreciate face-to-face service. Flagstar embraces FHA-backed mortgages, well suited for borrowers looking to qualify with rental payments, utility bills and other nontraditional credit sources.

Pros

  • Embraces FHA-backed home loans.

  • Offers several types of construction and renovation mortgages.

  • A professional loan package is tailored for the needs of doctors, lawyers, nurse practitioners, airline pilots and certified public accountants.

  • Flagstar reps are familiar with low-down-payment state bond programs for first-time home buyers and income-limited households, as well as the areas that qualify for USDA loans.

  • Offers home equity loans and home equity lines of credit.

Cons

  • Charges an average $1,295 in underwriting and processing fees.

Read Full Review

Bank of America: NMLS#399802

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Min. Credit Score

600

Min. Down Payment

3%


Why we like it

Ideal for borrowers who value a traditional bank with high-tech tools. Bank of America's Home Loan Navigator allows you to track the lending process online and upload paperwork digitally.

Pros

  • Allows borrowers to apply entirely online.

  • Offers down payment and closing cost assistance programs.

  • Accepts alternative credit data for some loan types.

  • May give existing customers a discount on mortgage lender origination fees.

Cons

  • Charges an application fee of $1,170, on average.

  • Has a high volume of consumer complaints, even for a big national bank.

Read Full Review

FHA loan FAQ

How do you apply for an FHA loan?

Applying for an FHA loan isn't especially different from what you'd do for a conventional mortgage. You don't apply to the Federal Housing Administration itself; you’ll work with a mortgage lender that likely offers other types of loans in addition to FHA loans.

The key difference is that your mortgage will be insured by the FHA. That backing makes lenders more willing to take on borrowers who might have a limited credit history or a down payment composed of gift money, for example.

» MORE: FHA vs. conventional loans

Who can qualify for an FHA loan?

To qualify for an FHA loan, you'll need a credit score of at least 500 if you're making a 10% down payment. To determine if you’re eligible for the lowest down payment — just 3.5% — FHA underwriters will look for a score of 580 or higher. You’ll also need to have a debt-to-income ratio of 50% or less.

» MORE: Debt-to-income ratio calculator

In addition to money for your down payment, you'll also need funds to cover FHA closing costs and an upfront mortgage insurance premium, which for FHA borrowers is 1.75% of the loan amount. Both the upfront insurance premium and the closing costs can be rolled into the total amount of the mortgage.

Bear in mind that these are the FHA's qualification guidelines; individual lenders may impose additional rules. That's another reason why it's worth comparing lenders. For example, if your credit score falls toward the low end of what's accepted or you have a nontraditional credit history, you may want to look to a lender like New American Funding, which offers manual underwriting.

Do you have to be a first-time home buyer for FHA?

No, you do not need to be a first-time home buyer to use an FHA loan. Lower credit score minimums and down payments certainly make FHA loans attractive to first-time home buyers, but current homeowners are eligible, too. In 2019, the most recent fiscal year for which data is available, about 83% of FHA purchase loans were made to first-time home buyers — which means 17% went to borrowers who were already homeowners. If this is your first rodeo, Citibank and Flagstar Bank are noted for being first-timer friendly as well as standout FHA lenders.

» MORE: How to qualify for first-time home buyer benefits

Can you get preapproval for an FHA loan?

Yes, you can get FHA loan preapproval. The process is similar to preapproval for other mortgage types, though you'll need to work with an FHA-approved lender. A lender with robust online functionality, like Quicken Loans, can speed the process by electronically accessing necessary info like your credit score, employment history and banking records.

A mortgage preapproval letter shows sellers that you're ready to commit: You've got a lender stating on paper (or digitally) that it is willing to loan you a particular amount of money and spelling out the conditions of the potential loan. Getting preapproved by more than one lender lets you compare not only rates but also all the fees and conditions each lender would apply.

» MORE: Learn how to get a mortgage preapproval

Can you get an FHA loan if you have student loans?

Yes, you can get an FHA loan even if you have student loan debt, though you'll still have to meet FHA debt-to-income requirements. FHA student loan guidelines state that lenders must include all student loans when calculating a borrower's debt-to-income ratio. If your payments are currently deferred, your lender will consider your "monthly obligation" to be 1% of your total student loan balance.

» MORE: How student loans impact getting a mortgage

Is an FHA loan a good idea for you?

Here are a few pros and cons to weigh:

Pros:

  • Lower minimum credit score requirements
  • Low down payments
  • 203(k) mortgage options that incorporate renovation costs

Cons:

More from NerdWallet

Last updated on February 23, 2020

Methodology

NerdWallet's selection of mortgage lenders for inclusion here was made based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.

To recap our selections...

NerdWallet's Best Lenders for FHA Loans in May 2020