Federal Housing Administration (FHA) loans are one of the most popular paths to homeownership in the United States, particularly for first-time buyers. Because they require lower credit scores and smaller down payments, they open doors for many borrowers. However, they come with specific Mortgage Insurance Premium (MIP) requirements. Our calculator accounts for these exact 2026 FHA guidelines.
Unlike conventional loans, FHA loans are insured by the government. This reduces the risk for lenders, which in turn allows them to offer more lenient qualifying terms:
Because FHA loans require such a small down payment, the risk of default is higher. To protect lenders, the FHA charges borrowers a Mortgage Insurance Premium (MIP). Unlike conventional Private Mortgage Insurance (PMI), FHA MIP has two distinct components:
Currently set at 1.75% of the base loan amount. Most borrowers choose to roll this fee directly into their total loan balance rather than paying it outright at closing. Our calculator automatically handles this inclusion.
Paid monthly, this fee is typically 0.55% of the outstanding loan balance for a standard 30-year FHA loan with 3.5% down. Note: If you put down less than 10%, this annual MIP cannot be cancelled and stays for the life of the loan. If you put down 10% or more, it drops off after 11 years.
Which is right for you? It largely depends on your credit score and available cash:
Many borrowers start with an FHA loan to acquire the house, build equity, and improve their credit. A few years later, they often use a Mortgage Refinance to switch from an FHA to a conventional loan to eliminate the permanent MIP.
No. While they are extremely popular among first-time homebuyers due to the low down payment requirements, FHA loans can be used by anyone, provided the property will be their primary residence. You cannot use an FHA loan for an investment property or a vacation home.
If you made a down payment of less than 10%, the annual MIP cannot be removed-it lasts for the life of the loan. The only way to remove it is to refinance the mortgage into a non-FHA loan. If you made a down payment of 10% or more, the MIP will automatically fall off after 11 years.
The standard minimum is 3.5%, assuming your credit score is at least 580. This down payment can come from your personal savings, or it can be fully funded by a gift from a family member or an approved down payment assistance program.
Precision calculations for MIP, VA funding fees, and USDA guarantee fees updated for 2026.
Amount: $12,250 • Required: 3.5%