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10 Best Lenders for FHA Loans in December 2021

FHA loans offer several benefits including low rates and low down payments. Compare some of the best FHA lenders to find the right fit for your needs.

NerdWalletNov 30, 2021

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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.

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.

The coronavirus pandemic introduced some new challenges to getting a mortgage. Many lenders facing high loan demand and staffing issues increased their fees, adjusted minimum required credit scores or temporarily suspended certain loan products. While some products and business practices have returned to pre-pandemic levels, you might still find delays and limited options. If you can’t pay your current home loan, refer to our mortgage assistance resource. For information on how to cope with financial stress during this pandemic, see NerdWallet’s financial guide to COVID-19.

Summary of Best Lenders for FHA Loans in December 2021

Quicken Loans
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at Quicken Loans

Quicken Loans: NMLS#3030

4.0

NerdWallet rating 
Quicken Loans

Min. Credit Score

580

Min. Down Payment

3.5%
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at Quicken Loans


Why we like it

Good for: borrowers who appreciate convenience online and on the go for a fully digital home loan experience with consistently acclaimed customer service.

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.

  • Streamlines the online process with document and asset retrieval capabilities, including the ability to edit your preapproval letter.

Cons

  • Getting a customized interest rate requires a credit check, which can affect your credit score.

  • Doesn't offer home equity loans or lines of credit.

  • Lender fees are on the high side and the fees aren't offset by particularly low mortgage rates, according to the latest data.

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AmeriSave
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at AmeriSave

AmeriSave: NMLS#1168

4.5

NerdWallet rating 
AmeriSave

Min. Credit Score

600

Min. Down Payment

3.5%
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at AmeriSave


Why we like it

Good for: borrowers seeking government loans, which are known for offering credit flexibility and low- or no-down-payment benefits.

Pros

  • A good variety of loan types and products.

  • A mobile-friendly application process.

Cons

  • An average loan origination fee that's higher than the national median.

  • Doesn’t offer home equity loans, home equity lines of credit or home improvement loans.

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PennyMac
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at PennyMac

PennyMac: NMLS#35953

4.5

NerdWallet rating 
PennyMac

Min. Credit Score

620

Min. Down Payment

3.5%
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at PennyMac


Why we like it

PennyMac excels in online capabilities and makes it easy to shop rates online. Average origination fees are higher than other lenders, and home equity lines of credit and jumbo mortgages were suspended due to the COVID-19 pandemic.

Pros

  • Offers a full range of online capabilities, including e-signatures and online loan process tracking.

  • Displays custom rate quotes based on home value, down payment or equity, ZIP code and credit score range.

Cons

  • Origination fees are higher than the median for all lenders.

  • Doesn't currently offer jumbo mortgages or home equity lines of credit.

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Carrington: NMLS#2600

4.5

NerdWallet rating 
Carrington

Min. Credit Score

500

Min. Down Payment

3.5%

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, such as bank statements and rent payments.

  • You can view customized rates for purchasing a home and apply online.

Cons

  • Doesn't offer home equity loans, HELOCs or renovation mortgages.

  • Lender fees and mortgage rates are on the high side, according to the latest data.

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Caliber: NMLS#15622

4.0

NerdWallet rating 
Caliber

Min. Credit Score

580

Min. Down Payment

3.5%

Why we like it

Good for: first-time home buyers, veterans and those who may have credit challenges to overcome.

Pros

  • Offers extensive educational resources for military borrowers.

  • Provides digital tools for a streamlined application process.

  • Participates in some state down payment assistance and first-time home buyer programs.

Cons

  • No mortgage rates displayed online.

  • Doesn’t offer home equity loans or lines of credit.

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Alterra: NMLS#133739

3.0

NerdWallet rating 
Alterra

Min. Down Payment

3.5%

National / Regional

Regional

Why we like it

Good for: first-time home buyers and those with nontraditional incomes.

Pros

  • Offers an ITIN qualification path for borrowers ineligible for Social Security numbers.

  • Has a digital application process.

  • Offers several mortgage options for low- to moderate-income borrowers.

  • Borrowers can qualify with income from self-employment and other nontraditional sources.

Cons

  • No mortgage rates published online.

  • No home equity loans or lines of credit.

  • Generally has higher rates and fees than other lenders.

  • Branch offices not available in all states.

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PrimeLending: NMLS#13649

3.5

NerdWallet rating 
PrimeLending

Min. Credit Score

580

Min. Down Payment

3.5%

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.

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Stearns Lending: NMLS#1854

4.0

NerdWallet rating 
Stearns Lending

Min. Credit Score

580

Min. Down Payment

3.5%

Why we like it

Good for: borrowers who want a variety of home loan options, including a government-backed renovation loan.

Pros

  • Offers conventional and government-backed loans with low-down-payment options, including FHA 203k renovation loans.

  • Has a mobile app to help streamline the application process.

  • Has a loan program for medical doctors and dentists with down payments as low as 5%.

Cons

  • Doesn’t display information online about rates and fees.

  • Doesn't offer home equity loans or HELOCs.

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Mr. Cooper: NMLS#2119

3.5

NerdWallet rating 
Mr. Cooper

Min. Credit Score

580

Min. Down Payment

3.5%

Why we like it

Good for: borrowers looking for lower credit score requirements and those who don’t mind fully remote customer service.

Pros

  • Offers a robust digital experience.

  • Will consider alternative credit data for FHA borrowers.

Cons

  • Requires a call or email for personalized rates.

  • Does not offer home equity loans or lines of credit, or home improvement loans.

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Freedom Mortgage: NMLS#2767

3.5

NerdWallet rating 
Freedom Mortgage

Min. Credit Score

500

Min. Down Payment

3.5%

Why we like it

Freedom offers a typical range of home loan options, but rates are not available on its website.

Pros

  • Offers conventional, FHA, VA, USDA and jumbo loans.

  • Multiple customer service options, including brick-and-mortar branches and online appointment setting.

Cons

  • No mortgage rates displayed online.

  • Does not offer home equity loans or lines of credit.

Read Full Review

Qualifying for an FHA loan

To qualify for an FHA loan, you'll need a credit score of at least 500 with a 10% down payment. To determine if you’re eligible for the lowest FHA down payment — just 3.5% — 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 just one reason it's worth comparing several lenders.

Are FHA loans only for first-time home buyers?

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 fiscal year 2020, about 83% of FHA purchase loans were made to first-time home buyers — which means 17% went to borrowers who were already homeowners.

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

Yes, you can get an FHA loan 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 from NerdWallet

Last updated on November 30, 2021

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 December 2021

Frequently asked questions