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11 Best Lenders for FHA Loans in November 2020

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.

NerdWalletNovember 23, 2020
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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.

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.

Summary of Best Lenders for FHA Loans in November 2020

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at Rocket Mortgage

Rocket Mortgage by Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
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Min. Credit Score

580

Min. Down Payment

3%

at Rocket Mortgage


Why we like it

Good for: borrowers who appreciate smartphone and online convenience for a fully digital home loan experience powered by Quicken Loans.

Pros

  • Caters to self-service users who want to apply for a home loan online and talk to a human only as necessary.

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

  • Offers document and asset retrieval capabilities.

Cons

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

  • Getting a customized interest rate requires a credit check, which can lower your credit score by a few points.

Read Full Review
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at New American

New American Funding: NMLS#6606

4.5

NerdWallet rating 
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Min. Credit Score

640

Min. Down Payment

3%

National / Regional

National

at New American


Why we like it

Good for: borrowers who need to be evaluated on the basis of nontraditional credit and those interested in various down payment assistance programs.

Pros

  • Uses manual underwriting to evaluate creditworthiness.

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

Cons

  • Mortgage rates offered to borrowers are higher than the government-reported median of all lenders.

Read Full Review
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at Quicken Loans

Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
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Min. Credit Score

580

Min. Down Payment

3%

at Quicken Loans


Why we like it

Good for: borrowers looking for just about all of the services your neighborhood lender does — with online convenience.

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 many working Americans.

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

  • Provides a wide variety of loan types, including renovation loans and all government-backed mortgage products.

Cons

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

  • Quicken's lender fees can be stout and they don't offset those fees with particularly low mortgage rates.

Read Full Review
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at Veterans United

Veterans United: NMLS#1907

4.5

NerdWallet rating 
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Min. Credit Score

660

Min. Down Payment

0%

at Veterans United


Why we like it

Good for: veterans, active-duty service members and eligible Reservists looking for VA or non-VA loans.

Pros

  • Offers 24/7 customer service over the phone.

  • Has online application and pre-qualification.

  • Offers a free credit counseling service.

  • Employs advisors from each branch of the armed forces.

Cons

  • Doesn’t offer home equity loans or HELOCs.

  • Veterans United has physical branch offices in only 18 states.

  • Information on FHA, USDA and conventional loans is harder to find on their website.

  • Charges higher rates and fees than some other lenders.

Read Full Review
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at Fairway

Fairway Independent Mortgage: NMLS#2289

4.0

NerdWallet rating 
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Min. Credit Score

640

Min. Down Payment

3%

at Fairway


Why we like it

Good for: borrowers who want access to a wide variety of mortgages and the convenience of a comprehensive mobile application process.

Pros

  • Offers a robust suite of loan products, including a variety of renovation loans.

  • Has a digital application that can be completed in 10 minutes.

  • Works with some state housing finance agencies to offer mortgages with down payment and closing cost assistance.

Cons

  • Mortgage rates aren't posted online.

Read Full Review

Carrington: NMLS#2600

3.0

NerdWallet rating 
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Min. Credit Score

500

Min. Down Payment

3%


Why we like it

Good for: first-time home buyers or credit-challenged borrowers interested in government loan products.

Pros

  • Offers multiple low-down-payment loan programs.

  • May consider alternative credit data, like bank statements and rent payments.

Cons

  • To get sample rates, you'll have to speak with a loan officer.

  • Doesn't offer home equity loans or HELOC.

Read Full Review

PrimeLending: NMLS#13649

3.5

NerdWallet rating 
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Min. Credit Score

580

Min. Down Payment

3%


Why we like it

Good for: borrowers looking for closing cost assistance, as well as those seeking to renovate or to build a new home.

Pros

  • Full online application includes document uploads and automated loan updates.

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

  • Offers a proprietary closing-cost assistance program.

Cons

  • No online mortgage rates — you have to contact the lender for info.

  • Doesn't offer home equity products.

Read Full Review

Guild Mortgage: NMLS#3274

3.5

NerdWallet rating 
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Min. Credit Score

580

Min. Down Payment

3%


Why we like it

Good for: first-time home buyers and others who may need the flexibility of a low-down-payment loan program.

Pros

  • Offers multiple online conveniences, including a full mortgage application, e-signatures and digital loan process tracking.

  • Offers a wide variety of loan products, including home improvement and manufactured home loans.

Cons

  • Does not offer home equity loan products.

  • Average interest rates and fees are higher than other lenders.

Read Full Review

Citibank: NMLS#412915

5.0

NerdWallet rating 
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National / Regional

National

Min. Down Payment

3%


Why we like it

Good for: Borrowers wanting to compare mortgage rates online for a variety of loan options.

Pros

  • Offers a wide variety of loan options, including low-down-payment mortgages and jumbo mortgages.

  • Provides customizable mortgage rates on its website.

  • Offers low rates and fees compared with other lenders.

Cons

  • Charges a mortgage application fee.

  • Requires help from a mortgage loan officer to complete the loan application online.

Read Full Review

Flagstar: NMLS#417490

5.0

NerdWallet rating 
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Min. Credit Score

640

Min. Down Payment

3%


Why we like it

Good for borrowers who want a wide range of choices — not only among mortgage products, but also in the channel they prefer, whether a branch, online or on the phone.

Pros

  • Offers a wide range of loan types and products, including FHA, VA and USDA.

  • Has a full suite of online conveniences.

  • Does well with rate transparency, and monthly payment estimates add mortgage insurance, when applicable.

Cons

  • Home equity lending is geographically limited.

Read Full Review

Bank of America: NMLS#399802

5.0

NerdWallet rating 
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Min. Credit Score

640

Min. Down Payment

3%


Why we like it

Good for: first-time home buyers looking for low-down-payment options and existing customers who may get a discount on fees.

Pros

  • Allows borrowers to apply entirely online.

  • Offers down payment and closing cost assistance programs.

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

Cons

  • Does not offer renovation loans.

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.

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.

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.

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.

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.

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 November 23, 2020

Methodology

NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. 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 November 2020