What you need to do to get an FHA loan
An FHA loan starts with a mortgage lender, not the Federal Housing Administration itself. The FHA insures the loan — meaning it backs the lender if you stop paying — but it does not lend the money. You will work with a bank, credit union, or mortgage company that is approved to make FHA loans. The process takes roughly 30 to 45 days from process to closing, and involves proving your income, credit history, and the property's condition.
The basic steps are: find a lender, get pre-approved, find a property, make an offer, order an FHA appraisal, finalize your loan, and close. Each step has documents you must provide and decisions the lender must make. Understanding what happens at each stage helps you move faster and avoid surprises.
Key Takeaways
- You must work with an FHA-approved lender — banks, credit unions, and mortgage companies that participate in the program — not the FHA directly.
- Pre-approval shows you what loan amount you can get and locks in an interest rate for a set period, usually 60 to 90 days.
- The FHA appraisal is mandatory and checks that the property meets safety and livability standards; a low appraisal can delay or end the deal.
- You will need recent tax returns, pay stubs, bank statements, and proof of employment to document your income and savings.
- Closing happens at a title company or attorney's office and is where you sign final documents and transfer money.
Step 1: Find an FHA-approved lender and get pre-approved
Start by contacting banks, credit unions, or mortgage lenders in your area. Ask whether they make FHA loans and what their rates and fees are. You can also search the FHA Lender Directory on HUD.gov to find approved lenders near you, though this list does not show rates or customer reviews — it only confirms they are authorized.
Pre-approval is a lender's written statement of how much you can borrow based on your credit score, income, and debts. To get pre-approved, you will provide your Social Security number, recent pay stubs (usually two months), recent tax returns (usually two years), and bank statements showing your savings. The lender pulls your credit report and calculates your debt-to-income ratio — the percentage of your monthly income that goes to debt payments. FHA loans typically allow ratios up to 50 percent, though some lenders are stricter.
Pre-approval usually takes a few days. The lender gives you a letter stating the loan amount, interest rate, and how long the rate is locked in (commonly 60 to 90 days). This letter shows sellers you are a serious buyer. Do not confuse pre-approval with pre-qualification, which is just a rough estimate and carries no weight with sellers.
Step 2: Find a property and make an offer
Once you have pre-approval, you can search for homes within your approved price range. You may work with a real estate agent, though you do not have to. When you find a property you want, you make an offer through the seller's agent or directly to the seller. The offer includes the price, the closing date, and any contingencies — conditions that must be met for the deal to go through.
A standard FHA contingency is that the appraisal must come in at or above the offer price. If it does not, you have options: renegotiate the price, pay the difference in cash, or walk away. Another common contingency is that the home inspection must pass or you can request repairs. Include these in your offer so you are protected if problems arise.
Once the seller accepts your offer, you move into the formal loan process. The seller's agent or attorney will send you a purchase agreement to sign. At this point, you typically put down earnest money — a deposit showing good faith, usually 1 to 3 percent of the offer price — held by the title company until closing.
Step 3: Submit your full loan process
After your offer is accepted, your lender will ask you to complete a full Uniform Residential Loan process (Form 1003). This is longer than the pre-approval paperwork and asks for detailed information about your employment history, assets, liabilities, and the property itself. You will also sign authorization forms allowing the lender to verify your employment, pull updated credit reports, and request documents from your employer or bank.
At the same time, you will order a home inspection (usually 7 to 10 days) and the lender will order the FHA appraisal (usually 5 to 10 days). You pay for both. The home inspection is for your protection; the appraiser works for the lender and the FHA. The appraisal determines whether the property is worth the price you agreed to pay and whether it meets FHA minimum property standards — no major structural damage, functioning utilities, no lead paint hazards in homes built before 1978, and no signs of pest infestation.
Step 4: Provide documentation of income and assets
Your lender will request specific documents to verify everything you stated on your process. Standard documents include the last two months of pay stubs, the last two years of federal tax returns, the last two months of bank statements, and a letter from your employer confirming your job title, salary, and start date. If you are self-employed, you will need profit-and-loss statements and possibly a CPA letter.
If you have changed jobs in the past two years, bring an offer letter from your new employer or a letter from your previous employer stating your end date and final salary. If you receive income from Social Security, disability, child support, or alimony, bring documentation showing the amount and how long you will receive it. The lender wants to know that your income is stable and will continue.
If you are using a gift for your down payment, the person giving the gift must provide a letter stating the amount, that it is a gift (not a loan), and that they do not expect repayment. You will also need a bank statement showing the gift was deposited into your account. FHA rules allow gifts from family members or certain non-profit organizations, but not from the seller or anyone with a financial interest in the sale.
Step 5: Review the appraisal and address any issues
The appraisal typically comes back 5 to 10 days after it is ordered. If the appraised value is at or above your offer price, you move forward. If it is lower, you have three choices: renegotiate the price with the seller, pay the difference in cash at closing, or cancel the deal (if your offer included an appraisal contingency).
If the appraisal flags FHA property standard violations — such as peeling paint, a non-functioning bathroom, or a roof that needs replacement — the seller must repair them before closing. The lender will not fund the loan until these repairs are done and verified. This is one of the most common reasons FHA loans are delayed. If the seller refuses to repair, you can walk away or negotiate a credit toward repairs you will make yourself after closing.
Step 6: Finalize your loan and review closing documents
Once the appraisal is approved and all documentation is submitted, your lender's underwriting team reviews your complete file. Underwriting typically takes 3 to 5 business days. The underwriter may ask follow-up questions or request additional documents — for example, an explanation letter if you have late payments on your credit report, or clarification about a large deposit in your bank account.
When underwriting is complete, the lender issues a clear-to-close letter. This means your loan is approved and you are ready to schedule closing. Your lender will send you a Closing Disclosure form at least three business days before closing. This document shows your final loan amount, interest rate, monthly payment, closing costs, and how much cash you need to bring to closing. Review it carefully and ask your lender about anything you do not understand.
Step 7: Close the loan and get the keys
Closing happens at a title company, attorney's office, or lender's office. You will sign the promissory note (your promise to repay the loan), the mortgage or deed of trust (the lender's security interest in the property), the Closing Disclosure, and other documents. Bring a photo ID and a cashier's check or arrange a wire transfer for your down payment and closing costs. The exact amount is shown on your Closing Disclosure.
The title company records the mortgage with the county, transfers the deed to your name, and distributes funds to the seller, the real estate agents, and other parties owed money. This process usually takes a few hours. Once everything is signed and recorded, you receive the keys and become the owner. The lender funds the loan (sends the money to the title company) either at closing or the next business day.
Common mistakes to avoid during the FHA loan process
Do not make large deposits into your bank account without documenting where the money came from. Lenders must verify all deposits over a certain amount (often $500 or $1,000) to may support you are not borrowing money, which would increase your debt and lower your approval. If you receive a gift, have the giver provide a letter before you deposit it.
Do not change jobs or quit your job during the loan process. Lenders verify employment right before closing, and a job change can trigger additional questions or delay approval. If you must change jobs, tell your lender when ready and provide an offer letter from your new employer.
Do not explore for new credit, make large purchases, or carry high balances on credit cards. These actions lower your credit score and increase your debt-to-income ratio, both of which can reduce your approval amount or result in a higher interest rate. Wait until after closing to make major purchases.
Do not skip the home inspection. The home inspection is separate from the FHA appraisal and protects you by identifying problems the appraiser might miss. The appraiser checks whether the home meets FHA standards; the inspector checks whether it is in good condition and safe to live in.
Frequently Asked Questions
How much down payment do I need for an FHA loan?
The minimum down payment is 3.5 percent of the purchase price. On a $200,000 home, that is $7,000. You can use a gift from a family member or non-profit organization to cover part or all of your down payment, but you must document the gift with a letter from the giver.
What credit score do I need for an FHA loan?
There is no official FHA minimum, but most lenders require a score of 580 or higher. Some lenders will go as low as 500 with a larger down payment or higher interest rate. Your score is one factor; lenders also look at your payment history, how much debt you carry, and how long you have had credit.
What happens if the appraisal comes in low?
You can renegotiate the price with the seller, pay the difference in cash, or cancel the deal if your offer included an appraisal contingency. The lender will not lend more than the appraised value, so one of these options must happen for the deal to close.
Can I get an FHA loan if I have had a foreclosure or bankruptcy?
Yes, but there are waiting periods. After a foreclosure, you typically must wait three years. After a Chapter 7 bankruptcy, you must wait two years from discharge. After a Chapter 13 bankruptcy, you may be able to get a loan while still in the repayment plan if you have made all payments on time. Ask your lender about your specific situation.
How long does the whole process take?
From process to closing typically takes 30 to 45 days. Pre-approval can happen in a few days. The appraisal and home inspection take 5 to 10 days each. Underwriting takes 3 to 5 business days. Delays can happen if documents are missing, if the appraisal is low, or if the property needs repairs to meet FHA standards.