FHA loans are built for buyers who don't have a large down payment saved or whose credit has a few dings. You can buy with as little as 3.5% down, and the 2026 FHA limit in Pierce and King counties is $1,063,750, high enough to cover most homes in the South Sound. Marc Hendrickson walks you through the full cost, mortgage insurance included, before you decide.
Every FHA loan carries mortgage insurance, paid two ways. Knowing both numbers is the only honest way to compare FHA with a conventional loan.
Premiums reflect HUD Mortgagee Letter 2023-05, still in effect for 2026. Annual MIP varies slightly by loan size, term, and down payment.
That monthly MIP is the number to weigh against conventional PMI, which can be lower with good credit and comes off once you reach enough equity.
FHA loans are insured by the Federal Housing Administration, which lets lenders approve buyers that conventional guidelines would turn away.
Buy with as little as 3.5% down, and that money can come from a gift from family rather than your own savings.
Scores of 580 and up qualify with 3.5% down. Scores from 500 to 579 can still qualify with 10% down, and past credit problems aren't automatically disqualifying.
FHA loans can be taken over by a qualified buyer when you sell. If rates have risen by then, your lower rate becomes a real selling point.
FHA guidelines are set nationally by HUD, so the basics are consistent from lender to lender.
580 or higher for the 3.5% minimum down payment, or 500 to 579 with at least 10% down.
3.5% minimum. Gift funds from family and some approved assistance sources can cover it, with a signed gift letter.
FHA often allows higher debt-to-income ratios than conventional loans, especially with an automated approval.
You must live in the home. FHA can finance 1 to 4 unit properties if you live in one of the units.
Typically 2 years after a Chapter 7 discharge and 3 years after a foreclosure, with re-established credit.
The FHA appraisal checks that the home is safe and sound. Major repairs may need to be fixed before closing.
FHA's 2026 limit in Pierce and King counties matches the high-balance conforming limit, so loan size is rarely the obstacle here. Down payment and credit usually are, and that's where FHA helps.
For buyers with modest savings, 3.5% down plus seller help with closing costs can make a first purchase realistic years sooner than saving 20%.
FHA allows the same 3.5% minimum down on a duplex, triplex, or fourplex if you live in one unit, and rent from the other units can help you qualify.
FHA financing on a condo requires the project to be FHA-approved or the unit to qualify for single-unit approval. Marc checks this before you write an offer, not after.
If rates drop, an FHA Streamline refinance can lower your rate with reduced paperwork. Once you reach about 20% equity, refinancing into a conventional loan can drop mortgage insurance altogether.
Marc compares FHA mortgage insurance against conventional PMI over the years you'll actually own the home, so you can see which costs less. See conventional loans.
FHA lets sellers contribute up to 6% of the price toward your closing costs and prepaid items. Marc helps you and your agent structure an offer that uses it.
Marc's approach is built around keeping you educated on the process, not just moving you through it, which matters most for first-time FHA buyers.
What credit score do I need for an FHA loan?
580 or higher qualifies for the 3.5% minimum down payment. Scores between 500 and 579 can qualify with at least 10% down.
How much is FHA mortgage insurance?
An upfront premium of 1.75% of the base loan amount, usually financed into the loan, plus an annual premium of 0.55% for most 30-year loans, paid monthly.
Does FHA mortgage insurance ever go away?
With less than 10% down, it lasts for the life of the loan. With 10% or more down, it ends after 11 years. Many borrowers refinance into a conventional loan once they reach about 20% equity to drop it sooner.
What is the FHA loan limit in Pierce County?
$1,063,750 for a one-unit home in 2026, the same as King County. That covers the large majority of homes in the South Sound.
Can I use gift money for my FHA down payment?
Yes. Gifts from family members, employers, and some approved sources can cover your down payment, documented with a signed gift letter and a record of the transfer. The giver can't be the seller, the builder, or anyone else with a financial stake in the sale.
Can I get an FHA loan after bankruptcy?
Often, yes. The typical wait is 2 years after a Chapter 7 discharge. With a Chapter 13, you may qualify after 12 months of on-time plan payments with court approval.
Is FHA only for first-time buyers?
No. Repeat buyers can use FHA too, as long as the home will be your primary residence. FHA generally limits you to one FHA loan at a time, with exceptions for situations like a job relocation or a growing family.
Can the seller help with closing costs on an FHA loan?
Yes. Sellers can contribute up to 6% of the sale price toward your closing costs and prepaid items.
Turn Two Mortgage is based in Lake Tapps, and Marc works with FHA borrowers throughout Pierce and south King counties. See what buying and owning a home looks like in each community we serve.
Quick, custom quotes with no pressure, and a clear explanation of every cost.
