Published September 12, 2026 — Washington, D.C. FHA mortgage rates rose to 6.27% (+11bp post-CPI) for 30-year FHA on September 11, 2026 per Mortgage Research. FHA loans remain the lowest-cost agency option for first-time buyers, typically 50-75 basis points below conventional conforming rates. The FHA requires just 3.5% down for borrowers with FICO 580+ and charges a 0.55% annual mortgage insurance premium.
Data last verified September 12, 2026 from Mortgage Research daily rate report (September 11, 2026), HUD FHA Handbook 4000.1, and Federal Housing Administration program guidelines.
Quick Answer
FHA mortgage rates on September 12, 2026: 30-year FHA at 6.27% (+11bp post-CPI per Mortgage Research). 15-year FHA at ~5.65% (estimate). FHA rates are typically 50-75bp below conventional conforming. With the post-CPI 30-year conventional at 6.83-7.10%, the spread has narrowed. FHA loans require 3.5% down for FICO 580+ borrowers and 10% for FICO 500-579, with 0.55% annual MIP. Best option for first-time buyers with limited down payment funds (Mortgage Research, September 11, 2026; HUD FHA Handbook 4000.1, 2026).
FHA loan program overview
The Federal Housing Administration (FHA) insures mortgages issued by FHA-approved lenders. Key program features:
| Feature | FHA loan |
|---|---|
| Minimum down payment | 3.5% (FICO 580+); 10% (FICO 500-579) |
| Minimum FICO | 500 |
| Upfront MIP | 1.75% of loan amount (rolled into balance) |
| Annual MIP | 0.55% of outstanding balance (typically for loan life) |
| Loan term | 15 or 30 years |
| Loan limits (2026) | $524,225-$1,209,750 by county |
| Property types | 1-4 unit primary residence, approved condos |
| Assumability | Yes - buyer can assume seller's FHA loan at the original rate |
| Seller concessions | Up to 6% of sale price |
Source: HUD FHA Handbook 4000.1 (2026); Mortgage Research.
FHA loan limits by county (2026)
FHA loan limits are tied to conforming loan limits and vary by county:
| Area type | 2026 FHA loan limit | Examples |
|---|---|---|
| Low-cost area baseline | $524,225 | Most US counties |
| High-cost area ceiling | $1,209,750 | Most expensive counties (Los Angeles, San Francisco, NYC, Honolulu) |
| Special high-cost areas | $1,500,000 (Alaska, Hawaii, Guam, USVI) | Alaska, Hawaii, Guam, US Virgin Islands |
Source: HUD FHA Mortgagee Letter 2026 (2026).
For first-time buyers in high-cost areas, the FHA loan limit of $1,209,750 provides significantly more purchasing power than the conventional baseline of $806,500 in most counties. FHA loans can finance properties up to the county-specific limit.
FHA mortgage insurance premium (MIP) details
FHA loans require both upfront and annual mortgage insurance premiums:
| MIP component | Rate | Application |
|---|---|---|
| Upfront MIP | 1.75% of loan amount | Rolled into loan balance at closing |
| Annual MIP (most loans) | 0.55% of outstanding balance | Divided by 12, added to monthly payment, required for loan life |
| Annual MIP (10%+ down) | 0.50% | May be canceled after 11 years if loan is current |
| Annual MIP (15-year, 78%+ LTV, FICO 680+) | 0.40% | May be canceled after 11 years |
Source: HUD FHA Handbook 4000.1 (2026).
The annual MIP effectively adds 0.40-0.55% to the mortgage rate. For a borrower comparing FHA at 6.27% vs conventional at 6.91% (both 30-year fixed): the FHA rate advantage is 64bp, partially offset by 55bp annual MIP = net FHA advantage 9bp. For borrowers with strong credit and 10%+ down, conventional may still be lower.
FHA vs conventional comparison for first-time buyers
| Factor | FHA loan | Conventional loan |
|---|---|---|
| Min. down payment | 3.5% (FICO 580+) | 3-5% (FICO 620+, with PMI) |
| Min. credit score | 500 | 620 (typical) |
| Base rate | 6.27% (30Y FHA, Sep 12, 2026) | 6.91% (30Y conv., Sep 12, 2026) |
| Mortgage insurance | 0.55% MIP (loan life) | PMI (cancellable at 78% LTV) |
| Effective rate | ~6.82% | ~6.91% (if PMI 0.40% at 95% LTV) |
| Loan limits | $524K-$1.21M (county-specific) | $806,500 baseline (most counties) |
| Assumability | Yes | No (typically) |
| Property eligibility | Primary residence only | Primary, second home, investment |
Source: HUD FHA Handbook 4000.1 (2026); Fannie Mae/Freddie Mac conforming loan guidelines (2026).
FHA Streamline Refinance for current FHA borrowers
Current FHA borrowers may benefit from refinancing via the FHA Streamline Refinance program:
- Eligibility: current FHA loan on the property; on-time mortgage payments for past 12 months; net tangible benefit (lower payment OR shorter term OR ARM to fixed conversion).
- No appraisal: in most cases, no appraisal required (uses original purchase appraisal plus current LTV estimate).
- Limited documentation: no income verification required; no credit score minimum in some cases.
- Closing costs: can be rolled into the loan balance or paid by lender through premium pricing.
- MIP: new MIP applies based on current loan balance and current MIP rate schedule.
With FHA rates at 6.27% (September 12, 2026), borrowers with FHA loans from 2023-2024 at 6.50-7.00% could save $50-150/month via streamline refinance. The breakeven on closing costs (typically 1-2% of loan balance) is typically 18-30 months, well within the average FHA borrower holding period (HUD FHA Handbook 4000.1, 2026).
Down payment assistance programs
Many first-time buyers combine FHA loans with down payment assistance (DPA) programs:
| DPA program type | Examples | Benefit |
|---|---|---|
| State housing finance agency | CalHFA (CA), CHFA (CT), Florida HFA, Texas Department of Housing | 0% interest loans; up to 5% of purchase price |
| Local government | Many cities and counties offer $5K-$25K grants or loans | Closing cost assistance; down payment supplements |
| Employer programs | Many large employers offer homebuyer assistance | $5K-$15K grants, often matched by employer |
| Teacher/First Responder programs | Many states offer reduced-rate or 0% loans for teachers, firefighters, police | Down payment + closing cost assistance |
| VA combined with FHA | Some programs stack benefits | Combined assistance for eligible borrowers |
Source: HUD, state housing finance agencies (2026).
DPA programs can effectively reduce the FHA down payment requirement from 3.5% to 0% in some markets, dramatically expanding first-time buyer access to homeownership.
FAQ
Can I use an FHA loan for a second home or investment property?
No. FHA loans are restricted to primary residences — the property must be the borrower's main residence. For second homes or investment properties, conventional, VA (eligible veterans), or portfolio lender products are alternatives. Conventional loans typically require 10-20% down for investment properties (HUD FHA Handbook 4000.1, 2026).
What is the difference between FHA 203(b) and FHA 203(k)?
FHA 203(b) is the standard FHA purchase or refinance mortgage. FHA 203(k) is a rehabilitation mortgage that combines the purchase price and renovation costs into a single loan. The 203(k) is useful for first-time buyers purchasing fixer-upper properties. There are two variants: Standard 203(k) for major renovations ($5K+); Limited 203(k) for minor renovations up to $35K. Both require 3.5% down and MIP applies (HUD FHA Handbook 4000.1, 2026).
Can I assume someone's FHA loan to get a lower rate?
Yes. FHA loans are assumable, meaning a buyer can take over the seller's existing FHA loan at the original rate and terms. In a 6.83-7.10% rate environment, assuming a 2020-2021 FHA loan at 2.50-3.50% provides significant savings. The buyer must qualify with the lender, the loan assumption process includes credit verification, and the seller typically requires release of liability. Assumability is a major advantage of FHA loans in rising-rate environments (HUD FHA, 2026).
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Fazlur Rahman is the founder of Tutorsbot, building AI-powered tools for learning and career growth. He writes about applying AI in real products and the practi… Read more
Fazlur Rahman is the founder of Tutorsbot, building AI-powered tools for learning and career growth. He writes about applying AI in real products and the practical side of building an ed-tech startup.
