FHA HOME LOANS · WASHINGTON STATE
Not everyone starts with
perfect credit or a
big down payment.
That's exactly what FHA is
for.
FHA loans exist to open the door to homeownership for buyers who are ready to own
but haven't had every advantage along the way. With as little as 3.5% down and more
flexible credit guidelines, it's often the right starting point — and I'll help you figure out if
it's right for you.
John P. Cobain · NMLS #374881 · Edge Home Finance · Licensed in Washington State
3.5%
Minimum down payment
580+
Credit score for 3.5% down
500+
Score for 10% down option
30+
Years helping buyers qualify
A WORD FROM JOHN
FHA loans are one of the most
misunderstood programs out there.
Let me clear it up.
I talk to a lot of buyers who assume FHA is a last resort — something you use when nothing else works. That's not how I see it at all. FHA is a well-designed program that intentionally serves buyers who are creditworthy and ready to own a home, but who haven't had the runway to save a large down payment or who've had some credit challenges along the way.
Life happens. Medical bills. Divorce. A period of unemployment. None of that means you shouldn't be able to buy a home. FHA guidelines recognize that, and so do I. My job is to look at your full picture — not just a number — and figure out the best path forward.
What I want every FHA buyer to understand going in is that there are costs specific to this loan type, particularly the mortgage insurance premiums. I'll explain exactly how those work, what they add to your monthly payment, and at what point it might make sense to refinance into a conventional loan down the road. No surprises. No fine print you find out about at closing.
"I want to give you more education and give you options and let you make the decision. That's been my approach for 30 years - and it doesn't change just because the loan type is different."
John P. Cobain, Loan Officer · Edge Home Finance
What FHA offers
A real path to homeownership for buyers who are
ready — wherever they're starting from.
FHA loans are backed by the Federal Housing Administration, which allows lenders to offer more flexible terms than conventional financing. Here's what that means in practice:
3.5% Minimum Down Payment
With a credit score of 580 or above, you can buy a home with just 3.5% down — significantly less than most conventional loan options. On a $350,000 home, that's about $12,250.
More Flexible Credit Guidelines
FHA is more forgiving on credit than conventional loans. Scores as low as 580 qualify for the 3.5% down option, and scores between 500 and 579 may still qualify with 10% down.
Higher Debt-to-Income Flexibility
FHA allows for a higher debt-to-income ratio than most conventional programs, which can make a real difference for buyers carrying student loans or other monthly obligations.
Gift Funds Allowed
Your entire down payment can come from a gift from a family member — something conventional loans restrict more tightly. If family wants to help, FHA makes that easier.
Down Payment Assistance Compatible
FHA loans can often be paired with Washington State down payment assistance programs, which may cover all or part of your 3.5% — making homeownership even more accessible.
Competitive Interest Rates
Because FHA loans are government-backed, lenders take on less risk — which often translates to competitive interest rates, even for buyers with less-than-perfect credit.
FHA vs. conventional
How does FHA stack up? Here's a plain-language comparison.
I show this comparison to a lot of buyers because it helps clarify when FHA makes the most sense — and when a conventional loan might be worth looking at instead. The right answer depends on your credit, your down payment, and your goals.
| Feature | FHA Loan | Conventional |
|---|---|---|
| Minimum down payment | 3.5% | 3-5%+ |
| Minimum credit score | 580 (3.5% down) | 620-640 typical |
| Mortgage insurance | Required (upfront + annual) | Required under 20% down |
| MI removal | 11 years (10%+ down) or refi | Removed at 20% equity |
| Gift funds for down payment | 100% allowed | Partially allowed |
| Debt-to-income flexibility | More flexible | Stricter limits |
| Loan limits | Set by HUD annually | Conforming limit |
Every situation is different. I'll run both scenarios with your actual numbers so you can see which one makes more sense for you specifically.
Understanding FHA Mortgage Insurance
MIP is the tradeoff for FHA's flexibility. Here's exactly how it works.
The one thing I always make sure FHA buyers fully understand before we go any further is mortgage insurance — specifically how FHA's version works, because it's different from conventional PMI. It's not a deal-breaker, but it's something you need to know going in.
Upfront MIP - 1.75%
A one-time premium equal to 1.75% of your base loan amount. On a $337,750 loan (after 3.5% down on a $350,000 home), that's about $5,911. It's typically rolled directly into your loan balance so you don't pay it out of pocket at closing.
Annual MIP - paid monthly
An ongoing premium paid as part of your monthly payment. The rate depends on your loan amount, loan term, and down payment - typically ranging from 0.15% to 0.75% annually. I'll show you the exact number for your scenario.
Understanding FHA mortgage insurance
MIP is the tradeoff for FHA's flexibility. Here's exactly how it works.
The one thing I always make sure FHA buyers fully understand before we go any further is mortgage insurance — specifically how FHA's version works, because it's different from conventional PMI. It's not a deal-breaker, but it's something you need to know going in.
FHA has two mortgage insurance components
Upfront MIP — 1.75%
A one-time premium equal to 1.75% of your base loan
amount. On a $337,750 loan (after 3.5% down on a $350,000 home),
that's about $5,911. It's typically rolled directly into
your loan balance so you don't pay it out of pocket at closing.
Annual MIP — paid monthly
An ongoing premium paid as part of your monthly payment. The rate depends on your loan amount, loan term, and down payment — typically ranging from 0.15% to 0.75% annually. I'll show you the exact number for your scenario.
Who FHA Is A Good Fit For
You don't have to have everything figured out to get started.
FHA works well for a wide range of buyers. Here are some of the most common situations I see where FHA is the right starting point:
Credit scores in the 580–640 range
Conventional loans get difficult below 640. FHA opens real options for buyers working their way back to stronger credit.
Limited savings for a down payment
3.5% is a much smaller hurdle than the 5–20% many buyers assume they need. We can also look at pairing FHA with down payment assistance.
Higher monthly debt obligations
Student loans, car payments, credit cards — FHA's more flexible debt-to-income guidelines can make qualifying possible when conventional won't work.
Gift funds from family
If a parent or family member wants to help with the down payment, FHA makes that straightforward — your entire down payment can be a gift.
Past credit events
Bankruptcy, foreclosure, short sale — FHA has defined waiting periods after these events, and once you've cleared them, you're eligible. I'll tell you exactly where you stand.
First-time buyers wanting a lower barrier to entry
Many first-time buyers use FHA to get into a home sooner, build equity, then refinance to conventional once their financial picture strengthens.
HOW IT WORKS
What to expect when we work through an FHA loan together.
The FHA process is similar to conventional in most ways, with a few extra steps related to the government-backed nature of the loan. Here's how I walk buyers through it:
01
We start with your full picture - before any paperwork
Credit, income, savings, debt. I want to understand where you are so I can tell you honestly whether FHA is the right fit, or whether another program might serve you better. No pressure either way.
02
Credit review and optimization
I go through your credit report with you — not to judge, but to look for anything that could be improved before we apply. Sometimes a small adjustment moves your score enough to meaningfully change your options. I'll show you what's possible.
03
MIP breakdown - in plain language
Before you commit to anything, I'll show you exactly what the upfront and annual MIP add to your costs, what your real monthly payment looks like, and at what point a future refinance to conventional might make sense. You'll know all of this before you sign anything.
04
Application and lender match
As a broker, I have access to multiple FHA-approved lenders. I'll find the one whose rate and terms are best suited to your profile — not just the first one that says yes.
05
FHA appraisal and underwriting
FHA appraisal and underwriting
FHA appraisals have specific property condition requirements — the home needs to meet certain standards. I'll make sure you and your realtor know what to expect so nothing holds up the process.
06
Clear to close - and a plan for what's next
Clear to close — and a plan for what's next
Once we close, the conversation doesn't end. I'll help you think through when it makes sense to revisit refinancing to a conventional loan to eliminate MIP — whether that's two years from now or five.
Common questions
What buyers ask me most about FHA loans
Is FHA only for first-time buyers?
No — that's one of the most common misconceptions. FHA loans are available to any eligible buyer, first-time or not. The program does have a rule that it must be used for a primary residence, but there's no requirement that it's your first home purchase.
What credit score do I need for an FHA loan?
A score of 580 or above qualifies you for the 3.5% down option. Scores between 500 and 579 may still qualify, but with a 10% down payment requirement. If you're below 580, let's talk — there may be things we can do to move that number before we apply.
Can I use down payment assistance with an FHA loan?
Yes, and this is one of the most powerful combinations available to Washington State buyers. Many DPA programs are specifically designed to work alongside FHA financing. I'll check what you qualify for and show you how the two work together.
Will I have to pay mortgage insurance forever?
Not necessarily. If you put 10% or more down, FHA annual MIP drops off after 11 years. If you put less than 10% down, MIP stays for the life of the loan — but many buyers refinance to a conventional loan once they've built 20% equity, which eliminates MIP entirely. I'll help you think through the timeline that makes sense for your situation.
How does FHA compare to a conventional loan with the same down payment?
It depends heavily on your credit score. If your score is above 680 or so and you have 5% down, conventional might actually cost you less once you factor in MIP. If your score is in the 580–640 range, FHA is usually the better deal. I'll run both scenarios side by side with your actual numbers so you can see exactly where the math lands.
Are there loan limits for FHA in Washington State?
Yes — FHA loan limits are set by HUD and vary by county. In higher-cost counties like King County, the limits are higher than the national baseline. I'll tell you the exact limit for wherever you're looking to buy.
Do you work with FHA buyers across all of Washington State?
Yes — I'm licensed throughout Washington and work with buyers in the greater Tacoma and Lakewood area, Spokane, and everywhere in between. Wherever you're buying, let's talk about whether FHA is the right fit.
Not sure if FHA is the right fit for you?
Let's find out together. A straight conversation about your credit, your savings,
and your goals is all it takes to know which direction makes the most sense —
no pressure, no obligation.
John P. Cobain · NMLS #374881 · Edge Home Finance · Washington State Licensed Mortgage Broker
Edge Home Finance · John P. Cobain · NMLS #374881 · This is not a commitment to lend. All loans subject to underwriting approval. Equal Housing Lender. USDA loan eligibility subject to property location and income requirements determined by USDA Rural Development.
