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5 Tips for Finding the Best FHA Mortgage Lenders

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All FHA mortgage lenders are not created equal. Here’s how to find the best FHA loan lender for you and your particular circumstances.

Finding the best FHA mortgage lender isn’t necessarily an easy task. First off, you have to narrow down the field to Federal Housing Administration-approved lenders; not every lender offers them. Then, you have to decide what your ideal FHA lender should bring to the table.

How to find the best FHA mortgage lender Use these five tips to find the best FHA mortgage lender for your situation. Read more about each tip here.

  1. Know your credit score. For a down payment as low as 3.5% you’ll need a score of at least 580.

  2. Shop more than one FHA lender. Each mortgage provider has different rates and services you’ll want to compare.

  3. Figure out the fees. FHA mortgage insurance is mandatory, but lender fees may be negotiable.

  4. Look for the APR. Compare each lender’s annual percentage rate — not just the interest rate — to choose the best deal.

  5. Find the right FHA lender for your situation. Decide which features and benefits are important to you, and don’t settle until you find them.

NerdWallet has researched some of the top FHA mortgage lenders to help you quickly find the right one for your needs.

Summary of 5 Tips for Finding the Best FHA Mortgage Lenders

LenderNerdWallet Rating Minimum Credit Score Minimum Down PaymentLearn More

Rocket Mortgage: NMLS#3030

at Rocket Mortgage

Best for FHA mortgage lenders with the best online experience

620

3%

at Rocket Mortgage

Guild Mortgage: NMLS#3274

Best for FHA mortgage lenders with the best online experience

620

3%

Read review

New American Funding: NMLS#6606

at New American

Best for FHA mortgage lenders for borrowers with nontraditional credit

700

3%

at New American

PNC: NMLS#446303

Best for FHA mortgage lenders for borrowers with nontraditional credit

620

3%

Read review

Citibank: NMLS#412915

Best for FHA mortgage lenders for first-time home buyers

N/A

3%

Read review

Flagstar: NMLS#417490

Best for FHA mortgage lenders for first-time home buyers

620

3%

Read review
Logo

at Rocket Mortgage

Rocket Mortgage: NMLS#3030

Logo

Min. Credit Score

620

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

Guild Mortgage: NMLS#3274

Logo

Min. Credit Score

620

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
Logo

at New American

New American Funding: NMLS#6606

Logo

Min. Credit Score

700

Min. Down Payment

3%

National / Regional

National

at New American


Why we like it

Ideal for borrowers who need to be evaluated on the basis of nontraditional credit. New American Funding offers FHA and VA loans, works with down payment assistance programs, and helps borrowers whose credit histories don't fit the mold of traditional banking.

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

PNC: NMLS#446303

Logo

Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for borrowers with low-to-moderate incomes or limited down payments. PNC offers a low-down-payment loan with no mortgage insurance.

Pros

  • Considers nontraditional credit history like rent payments.

  • Online tools help you estimate mortgage payments and track application progress.

  • Several affordable loan options including FHA, VA, USDA and the PNC Community Loan.

Cons

  • It's not possible to complete the entire mortgage process online.

  • Offers mortgage loans nationwide, but has branches in only about two dozen states.

Read Full Review

Citibank: NMLS#412915

Logo

National / Regional

National

Min. Down Payment

3%


Why we like it

Ideal for first-time home buyers or those with weaker credit. Citibank, a large-scale mortgage lender with a full menu of home loan products, offers low down payment options and considers alternative credit data.

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

Logo

Min. Credit Score

620

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

  • Doesn’t offer renovation loans at this time.

  • Home equity lending is geographically limited.

Read Full Review

How to look for an FHA mortgage lender

Qualifying details, interest rates and loan terms vary from one lender to another. Here’s how to find the best FHA mortgage lender for you.

1. Know your credit score.

FHA is looking for borrowers with a credit score of at least 500. But if you want to get an FHA loan with a down payment as low as 3.5%, you’ll need a 580 FICO or above.

That’s just the first credit score hurdle: Lenders often tack on extra credit score requirements. So even though FHA may be looking for a 580, a lender might look for 600, 620 or better.

And FHA generally requires a debt-to-income ratio of 50% or less, but again, lenders can have even more stringent benchmarks.

2. Shop more than one FHA lender.

You want to do this not only because one lender may be a bit more lenient in qualifying a borrower than another, but also because FHA mortgage rates can be all over the place.

Lenders price their loans according to current market conditions, as well as mark up their interest rates due to business costs and profit targets. It’s like shopping for gas: One station may be much more expensive than a station right down the street.

3. Know the difference between FHA mortgage insurance premiums and lender fees.

FHA-backed loans require mortgage insurance, to help cover the costs of loan defaults. FHA mortgage insurance premiums are uniform. You’ll pay the same premiums at Bank A as you will at Credit Union B. Lender fees are not the same from lender to lender.

You’ll get an official loan estimate within three days after you apply for a mortgage. This is a standard, government-mandated form that you’ll get from each lender. It makes it pretty easy to compare the terms and fees each lender is offering.

On the second page of the loan estimate, look for “closing cost details.” Then, under “loan costs,” see Section A, “origination charges.” That’s where you’ll find each lender’s total fees.

The “application fee” and “underwriting fee” are lender charges. You may see all kinds of fees here, with all kinds of names. But other than discount points, lender fees are not a good thing and should be negotiated.

An upfront FHA mortgage insurance premium may be shown in Section B, "services you cannot shop for," or in the “other costs” column.

Ongoing mortgage insurance premiums, built into your monthly payment, will be on the last page of the loan estimate, under “projected payments.”

4. Look for the APR.

Another way to consider how much you’re paying in fees is to do a head-to-head comparison of annual percentage rates among lenders.

Your payment rate — the interest rate your monthly payment is based on — is shown on the front page of your loan estimate, under "loan terms."

The annual percentage rate — which is your base interest rate plus all loan fees — is on the third and final page of the loan estimate, under “comparisons.”

Lenders make money by either charging you fees — such as origination fees, application fees and processing fees — or by building their profit into the interest rate you pay.

Or both.

That’s why you want to consider your payment interest rate as well as your all-fees-included APR. Use NerdWallet’s mortgage APR calculator to help you see the difference between interest rate and annual percentage rate.

5. Find the right FHA lender for your situation.

Some lenders are built for an online experience, while others are best suited for face-to-face service. That’s why we’ve broken down the best FHA lenders in a variety of circumstances. You can check out our complete list of the best FHA mortgage lenders by category, or browse our short list above.

More from NerdWallet

Last updated on July 2, 2019

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 5 Tips for Finding the Best FHA Mortgage Lenders

  • Rocket Mortgage: Best for FHA mortgage lenders with the best online experience
  • Guild Mortgage: Best for FHA mortgage lenders with the best online experience
  • New American Funding: Best for FHA mortgage lenders for borrowers with nontraditional credit
  • PNC: Best for FHA mortgage lenders for borrowers with nontraditional credit
  • Citibank: Best for FHA mortgage lenders for first-time home buyers
  • Flagstar: Best for FHA mortgage lenders for first-time home buyers