If you’re a first-time home buyer with bad credit, an FHA loan is your best bet. This is because they require low down payments and are easier to qualify for compared to conventional loans. However, the problem is, where can one get the best FHA loan with the plethora of lenders at one’s disposal?
Just so you know, an FHA loan is not for a first-time home buyer. Homeowners who are seeking to refinance and repeat buyers can also enjoy this loan option.
9 Best FHA Loan Lenders of 2024
Here, we have compiled the Best FHA Loan Lenders of 2024 that excel in different ways. They include offering a very easy application process, competitive loan options, and amazing hands for help.
1. Rocket Mortgage
Rocket Mortgage is one of the best FHA loan lenders in the United States and has become a big household name. In 2024, most home loan lenders will look for a minimum credit score of 620. However, Rocket Mortgage accepts people with very low credit scores at 580 for certain loan options.
This lender has different programs that help potential applicants boost their credit scores before they apply.
However, keep in mind that if you apply for a loan with a low credit score, you may be subjected to high interest rates in the lender’s APR range.
Rocket Mortgage offers FHA loans, conventional loans, jumbo loans, and VA loans, but doesn’t offer USDA loans. Note: USDA offers easy loan repayment for at least 30 years.
2. Better
Better offers an easy online process that can help you get a 30-year FHA mortgage loan to purchase a home. Also, keep in mind that by working with a participating estate agent in Washington, DC, or one of the 19 states, you might be able to get at least $2,000 in lender credit to put toward your closing costs.
Better provides amazing perks like easy application, no origination, and more. The preapproval process only takes up to 3 minutes.
3. Guaranteed Rate
Guaranteed Rate has more than 200 branches nationwide. And it is available everywhere online in the United States. Unlike other lenders, the minimum credit score on FHA and VA loans is lower. It required just a 600 FICO. This can go a long way for first-time loan borrowers who do not have a credit history.
Under this lender, the minimum FICO requirement for a USDA loan and a conforming loan is 620. And it is just $600 for VA and FHA mortgages. However, Guaranteed Rate credit score requirements differ depending on the type of mortgage.
4. Chase
Chase is another top FHA loan lender of 2024. It offers a grant to help qualified borrowers cover closing costs. They also help find the closing cost.
Although you can’t apply for loans fully online, they provide you with an officer who guides you through the application process. Also, Chase is very confident that it can close your FHA loan within 30 days. And it will give you $5,000 if it comes late.
5. PNC Bank
PNC Bank works in all 50 states in the United States. And provide different mortgage products, including loans for low-income borrowers. It offers an online experience referred to as home sight that provides borrowers with a deep dive into the home buying journey.
Also, it helps customers to know the payment that they can afford and start shopping for homes with good loan products and real-time quotes. PNC Bank offers a full online pre-approval application process.
This means you can apply for a FHA loan online and receive approval in a few minutes. All you need is a minimum credit score of 620.
6. LoanDepot
LoanDepot is one of the most popular non-bank mortgage lenders in the United States. It has more than 100 branches across the country and provides an online application process. LoanDepot offers adjustable-rate mortgages, FHA loans, Jumbo loans, VA loans, 203(k) loans, and fixed-rate mortgages.
For FHA loans, it requires a minimum credit score of 580. And 700 is the minimum credit score for jumbo borrowers.
You can easily apply for loans online or at any of their locations in the United States. Currently, LoanDepot has origination centers in Tennessee, Arizona, and two others in California. And the lender is currently licensed in all 50 states.
7. Bank of America
The Bank of America provides grants of over $7,500 to reduce costs for low-income people who want to buy homes in specific areas. It provides another grant that can help cover the down payments of about 3% of the home process. This is only available to eligible borrowers. If you are eligible, it could allow you to finally become a homeowner.
8. Guild Mortgage
Guild Mortgage provides online and in-person mortgage services. It has branches in 31 states in the USA. It offers a good option for people with a low credit score, as low as 600.
Going through the loan application process through Guild Mortgage is very fast and easy. This makes it a very good choice for people who do not want to visit local branches. Guild Mortgage offers FHA loans, conventional loans, VA loans, USDA loans, and Jumbo loans.
9. Ally Home
Nowadays, it is very common for loan companies to charge different fees on mortgage applications. This includes an origination fee, an application fee, a processing fee, and underwriting fees.
All these fees can end up costing a huge amount during the home-buying process. However, you need to know that Ally Home does not charge these fees. Although they may charge a recording and appraisal fee, they also charge insurance and title search.
You can easily get pre-approved for a home loan in just 2–3 minutes online.
Frequently Asked Questions
Where do I get an FHA loan?
To apply, you’ll need to negotiate with a lender recognized by the Federal Housing Administration. Many banks, credit unions, and mortgage lenders provide FHA loans.
How do I get preapproved for a mortgage?
Mortgage preapproval is a lender’s offer to loan money to a buyer based on specified financial criteria and stipulations.
Begin by obtaining the documentation your lender will want, such as a copy of your Social Security card and most current W-2 forms, pay stubs, bank accounts, and tax returns. The lender you choose will next assist you with the preapproval procedure.
What are the benefits of an FHA loan?
One of the primary advantages of an FHA loan is that applicants can put as little as 3.5% down, which is less than most conventional mortgages. You can also qualify for an FHA loan with a credit score as low as 580 if you put down 3.5%, or 500 if you put down 10%.
