FHA Home Loans

🏠 FHA Loans & Zero-Down Options – 2026 Homeownership Made Easier
Flexible, low-down-payment (and even zero-down) mortgages from Cap One Lending

At Cap One Lending, we specialize in FHA loans that make homeownership more attainable for:

• First-time home buyers
• Credit-challenged borrowers
• Renters tired of paying someone else’s mortgage
• Low-to-moderate income households

Backed by the Federal Housing Administration, FHA loans offer low down payments, competitive rates, and easier qualification compared to many conventional loans.

✅ What Is an FHA Loan?

An FHA loan is a government-insured mortgage designed to help buyers who may not qualify under stricter conventional guidelines.

• Minimum down payment: As low as 3.5%
• Credit score: We can often help buyers with 600+ median scores (and in some cases, approvals below that with strong compensating factors and AUS approval)
• Perfect for: First-time buyers, renters transitioning to ownership, borrowers with prior credit issues, and households needing flexible underwriting.

FHA loans are a powerful tool to build long-term stability through homeownership.

💰 True Zero-Down FHA – Using Down Payment Assistance (DPA)

Want an FHA loan with effectively $0 down? In many cases, we can layer your FHA loan with eligible down payment assistance to cover the entire 3.5% down payment – and in some cases, help with closing costs as well.

How Zero-Down FHA Structures Typically Work

Your purchase is often structured as:

Primary FHA Loan (First Mortgage)

• Up to 96.5% of the purchase price
• Standard FHA guidelines, flexible credit, competitive rates
• Down Payment Assistance (Second Mortgage or Grant)
• Covers some or all of the 3.5% FHA down payment
• May also help with closing costs
• Can be:
• A forgivable second mortgage (forgiven after a set number of on-time payments or years) 
• A zero- or low-interest repayable second
• A grant that never has to be repaid, depending on the program

Common DPA Eligibility Factors

Most down payment assistance programs consider some combination of: 

• First-time home buyer status (or no home in the last 3 years)
• Primary residence only (no investment properties)
• Income limits based on area median income
• Maximum purchase price limits
• Homebuyer education course required
• Minimum credit score (often 640+, depending on program)

Result: When your approved DPA program covers the 3.5% down payment and some closing costs, you can achieve a true zero-down FHA purchase with minimal out-of-pocket funds at closing (subject to program availability and qualification).

Cap One Lending will help you:

• Identify eligible DPA options for your area
• Structure your FHA + DPA combo correctly
• Walk you through payment terms and long-term impact

🌎 2026 FHA Loan Limits (National Ranges)

FHA loan limits are tied to the 2026 conforming loan limits set by FHFA. For 2026, the baseline conforming limit for a 1-unit home is $832,750.

Based on federal formulas that set FHA limits at 65% of the conforming baseline (floor) and up to the high-cost “ceiling”, the projected 2026 FHA loan ranges are:

Effective for case numbers assigned on or after January 1, 2026 (subject to final HUD publication). Scotsman Guide+1

Low-Cost Areas – National FHA “Floor” (Projected 2026)

(These are approximately 65% of the 2026 conforming loan limits, rounded to whole-dollar amounts.) 

High-Cost Areas – National FHA “Ceiling” (Expected 2026)

For high-cost markets, FHA limits are expected to align with the 2026 high-cost conforming ceilings: 

Important: Actual limits vary by county and property type. Cap One Lending will confirm your exact FHA loan limit for the property’s county and number of units at application.

💡 FHA Loan Benefits with Cap One Lending

• Low Down Payment: As little as 3.5% down – and potentially $0 down with qualifying DPA
• Flexible Credit Requirements:
• We generally look for 600+ median FICO
• Some approvals may be possible below that with strong compensating factors and AUS approval
• No Prepayment Penalties: Pay your loan off early or refinance with no penalty
• Gift Funds Allowed:
• Down payment and closing costs can come from family gifts, employer assistance, or eligible grants
• Seller Credits:
• Sellers can contribute up to 6% of the purchase price toward your closing costs
• Multi-Unit Options:
• Buy up to a 4-unit property with FHA
• Live in one unit and rent out the others to help offset your payment
• Manufactured Homes Eligible:
• Allowed when on a permanent foundation and meeting HUD/FHA guidelines

🧮 FHA Mortgage Insurance – UFMIP & Annual MIP

All FHA loans include mortgage insurance premiums (MIP), which protect the lender and allow you to qualify with lower down payment and more flexible credit.FHA+1

Upfront Mortgage Insurance Premium (UFMIP)

• Standard rate: 1.75% of the base loan amount
• Usually financed into the loan, rather than paid in cash at closing
• If you refinance from one FHA loan to another within 3 years, you may receive a partial UFMIP refund applied toward the new UFMIP

Annual Mortgage Insurance Premium (MIP)

MIP is charged annually and paid monthly. Current FHA guidance (still in effect for 2025) generally looks like this:

Loans Over 15 Years (e.g., 30-Year FHA) – Loan Amount ≤ $726,200

• LTV ≤ 90%: 0.50% for 11 years
• LTV > 90% to ≤ 95%: 0.50% for full term
• LTV > 95%: 0.55% for full term

Loans Over 15 Years – Loan Amount > $726,200 (“High Balance”)

• LTV ≤ 90%: 0.70% for 11 years
• LTV > 90% to ≤ 95%: 0.70% for full term
• LTV > 95%: 0.75% for full term

Loans 15 Years or Less

• Loan Amount ≤ $726,200
• LTV ≤ 90%: 0.15% for 11 years
• LTV > 90%: 0.40% for full term
• Loan Amount > $726,200
• LTV ≤ 78%: 0.15% for 11 years
• LTV > 78% to ≤ 90%: 0.40% for 11 years
• LTV > 90%: 0.65% for full term FHA

Key MIP Notes:

• MIP is calculated on the base loan amount (before financed UFMIP)
• If LTV ≤ 90%, MIP generally lasts 11 years
• If LTV > 90%, MIP generally lasts the full loan term

🔍 FHA Loan Guidelines at a Glance

Maximum Loan-to-Value (LTV)

• Purchase: Up to 96.5% LTV (3.5% down)
• Rate-and-Term Refinance: Up to 97.75% LTV
• Cash-Out Refinance: Up to 80% LTV

Loan Types Available

• Fixed-Rate Mortgages: 10, 15, 20, 25, or 30 years
• ARMs (Adjustable-Rate Mortgages): 5/1 ARMs available on some FHA programs

Debt-to-Income (DTI) Ratio

• Standard guideline DTI max around 43%
• Automated approvals sometimes allow DTIs up to ~60% with strong compensating factors (reserves, strong credit, low payment shock, etc.)

Occupancy Requirement

• Must be your primary residence
• Second homes and investment properties are not allowed under standard FHA purchase guidelines (though you can buy up to a 4-unit and live in one unit)

🔁 FHA Refinance Options

FHA Streamline Refinance

Designed for borrowers who already have an FHA loan and want to lower their rate or payment with minimal documentation.

• No appraisal required (in most cases)
• No income documentation
• No cash back (other than small incidental credits up to $500)
• Must meet Net Tangible Benefit (NTB) requirements (e.g., rate reduction, payment reduction, moving from ARM to fixed) HUD Answers+1
• Payment history requirements:
• At least 6 monthly payments made on the current FHA loan
• At least 210 days must elapse from the original FHA note date to the new loan funding date

FHA Rate-and-Term Refinance

For homeowners looking to reduce their rate, change their term, or move out of a costly loan type:

• Full income, credit, and asset verification
• Appraisal required
• Can shorten your term (e.g., 30-year to 20-year)
• Limited cash back allowed (≤ $500 incidental)

FHA + DPA & 2026 Limits – Quick FAQ

Can I get an FHA loan with no money down?
Yes – not by changing FHA’s 3.5% requirement, but by pairing your FHA loan with eligible down payment assistance that covers your 3.5% down payment and possibly some closing costs. This can create a true zero-down structure for qualifying buyers and properties.

Are the 2026 FHA loan limits final?
FHA limits are set using the formula tied to the 2026 conforming loan limits, and the ranges above reflect that formula. HUD typically releases the official FHA limit tables in late November/December each year. We’ll confirm your exact county-specific limit at application and keep this page updated as HUD publishes final 2026 numbers. 

Do I have to be a first-time buyer to use FHA?
No. FHA loans are open to first-time and repeat buyers, as long as the home will be your primary residence.

Can I use gift funds and DPA together?
Often yes. Many buyers combine gift funds from family with grant or second-lien assistance to minimize or eliminate out-of-pocket funds. Program rules vary – we’ll structure it for you.

📞 Get Started with Your FHA or Zero-Down FHA Option

Your path to affordable homeownership starts here.

At Cap One Lending, we make the FHA process simple, fast, and transparent – whether you’re:

• Buying your first home
• Moving up to a larger home or multi-unit property
• Refinancing to lower your rate or payment

We’ll help you compare FHA vs. Conventional vs. VA/USDA, explore down payment assistance & true zero-down structures, and build a custom plan that fits your budget and long-term goals.