FHA Loan Calculator 2026 — MIP, Down Payment & Limits

FHA loans are mortgages insured by the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (HUD). They are designed to help borrowers who may not qualify for conventional loans, particularly first-time homebuyers, by offering lower down payment requirements and more flexible credit standards. The minimum down payment is 3.5% for borrowers with a credit score of 580 or higher, or 10% for scores between 500 and 579. FHA loans are available as 15-year or 30-year fixed-rate mortgages.

The trade-off for easier qualification is mortgage insurance premiums (MIP). FHA loans require two forms of insurance: an upfront mortgage insurance premium (UFMIP) of 1.75% of the base loan amount, which is typically rolled into the loan balance, and an annual MIP that is paid monthly. For most borrowers putting down less than 5% on a 30-year loan, the annual MIP rate is 0.55% of the outstanding loan balance. Unlike conventional PMI, FHA annual MIP generally remains for the life of the loan unless you made a down payment of at least 10%, in which case MIP drops off after 11 years.

FHA loan limits vary by county and are based on local median home prices. In 2026, the floor limit (for low-cost areas) is $524,225, while the ceiling (for high-cost areas) is $1,209,750. Most counties fall somewhere between these figures. Borrowers must also meet FHA debt-to-income requirements: a front-end ratio (housing costs / gross income) of no more than 31% and a back-end ratio (total debts / gross income) of no more than 43%, though compensating factors may allow higher ratios.

When comparing FHA to conventional loans, the key considerations are total cost and break-even points. FHA loans are generally cheaper in the early years for borrowers with lower credit scores because the interest rate tends to be lower than what a conventional lender would offer for the same credit profile. However, the permanent MIP on FHA loans can make them more expensive over the full 30-year term. Many borrowers use FHA financing initially, then refinance into a conventional loan once they have 20% equity and stronger credit, eliminating the ongoing MIP.