In July 2024, the Federal Housing Administration (FHA) loan is one the best lenders if you have poor credit and wish to make a small down payment when looking for a mortgage. These government-backed mortgages were developed during the Great Depression to help Americans who were low- and moderate-income buy homes. However, these mortgages accepted borrowers with credit scores as low as 580.
A credit score as low as 500 can be approved for FHA loan lenders by borrowers who make a 10% down payment in July 2024. Moreover, to assist you in selecting the best FHA loan choice, this article has compiled a list of the top ten lenders. Furthermore, we evaluated multiple lenders based on features, affordability, customer service, and convenience of application.
Best FHA Loan Lenders of July 2024
Federal Housing Administration (FHA) loans are preferred by first-time home buyers due to their credit score and down payment requirements in comparison to conventional mortgages. Also, remember that FHA loan lenders are not limited to those purchasing a first home. However, returning customers and homeowners looking to refinance may also benefit from this type of financing.
The lenders that go above and beyond to assist customers in becoming homeowners will be the top providers of FHA loans in July 2024. These companies differentiate themselves from the competition by providing competitive annual percentage rates (APRs), more accommodating debt-to-income (DTI) ratios and credit score criteria, comparatively fast closing timeframes, and other features.
Here are some of the best lenders to take into consideration if you believe that an FHA loan is your greatest chance at becoming a homeowner in July 2024.
Rocket Mortgage
Rocket Mortgage is the top FHA lender in the country in addition to aiding borrowers with small down payments. All home purchasers and refinancing customers may apply for and manage their loans using the lender’s user-friendly website and app. In measuring consumer satisfaction, Rocket routinely receives top marks. Mortgage rates are approximately typical, but origination fees are a little on the expensive side.
Additionally, it offers conventional loans with fixed or adjustable rates, as well as government-backed FHA and VA loans. Furthermore, it also provides unique options like ONE+ by Rocket Mortgage, which allows qualified first-time and repeat buyers to put down as little as 1% for a conventional loan on a primary residence.
New American Funding
In the Finance’s affordability section, New American Funding is rated five stars due to its wide range of loan options. However, the transparency of mortgage rates needs to be improved. On their FHA Loan Details by State page, New American Funding allows you to choose your state and view local FHA loan advantages and regulations. Additionally, there’s a lot of informative material on the FHA page on qualifying standards, different kinds of FHA loans, advantages of different FHA loan terms, and more.
The Pathway to Homeownership initiative is designed for first-time homebuyers who require up to $8,000 in funding for closing expenses or a down payment. Moreover, there are additional requirements. However, this program is only for conventional loans, not FHA loans. If you are eligible for this aid, it can help you decide between an FHA and a conventional mortgage.
PNC Bank
PNC Bank Mortgage ranks third because it extends its reach by offering FHA loans with no minimum loan amount and by lending in all 50 states as well as Washington, D.C. This makes it possible for borrowers to obtain financing for more affordable homes that they might not have otherwise been able to. Additionally, PNC Bank provides other kinds of home loans aside from FHA loans, including conventional, VA, USDA, and jumbo loans, home equity, and specialty loans for medical professionals.
Furthermore, the company offers low credit score requirements, fast preapproval, online and in-person services, various discount programs, and extensive digital support for existing customers. PNC requires a minimum credit score of 620 for VA loans, a minimum down payment of 3% for conventional loans, and 3.5% for FHA loans.
Guaranteed Rate
Guaranteed Rate is the only mortgage lender that provides a unified app to help you manage both your loan and your physical and emotional health. Additionally, the Rate App offers loan updates with a range of guided physical exercises and mindfulness practices. This includes seminars offered by professionals, to help you stay as composed as possible while buying a home.
Guaranteed Rate offers same-day approval, an integrated app focusing on mental health and wellness, and 500 branches across the U.S. for in-person service. However, to obtain comprehensive rate information, you must start the application procedure. Furthermore, the minimum credit score is 620, closing days are 10 or more, minimum down payment is 3%, FHA is 3.5%, and terms are adjustable.
Bank of America Financial
Bank of America provides subsidies of up to $7,500 to help lower-income borrowers purchase homes in specific areas. For qualified borrowers, there is an additional grant program that can assist with a down payment of up to 3% of the purchase price of the home, or $10,000. The ability to eventually acquire a home may depend on your eligibility for one or both of these grants.
Additionally, grants do not require a return, unlike loans. This lender offers a member rate or origination fee reduction, with a preapproval period of up to 10 days and a 45-day closing time. The program assists with down payment and closing costs, without requiring a minimum credit score or DTI ratio, and may offer rate or origination fee reductions. However, it does not disclose FHA rates and only offers FHA refinance loans to existing customers, with poor Trustpilot reviews and a slow preapproval process.
Guild Mortgage
Guild Mortgage offers a wide range of lending options to clients with credit scores far lower than what most lenders demand with an A+ rating from the Better Business Bureau. Additionally, a credit score is not even necessary in certain situations. It offers other choices for minimal down payments as well. Guild mortgages require a 620, 540, or no credit score, and aside from offering FHA, it offers conventional, construction, VA, USDA, and Jumbo loans.
Better
Better provides an online mortgage process and can help you obtain a 30-year FHA loan to purchase a property. Additionally, you might be eligible to receive up to $2,000 in lender credits to apply to your closing costs if you engage with a participating real estate agent in one of the 19 states or Washington, D.C. The company offers no lender fees, no commission-based loan officers, and excellent Trustpilot reviews.
However, it does not provide 15-year FHA loans, no float-down option, or timely customer complaints response. Furthermore, the lender offers interest rates that are below the national average, with a 50% DTI ratio. There are no origination, application, processing, or underwriting fees, and the loan can close within 3 to 6 weeks.
Ally Financial
Ally can have you preapproved in a matter of minutes. And if you believe that the expense justifies the convenience, you should reconsider. Additionally, home loans are provided by Ally with no lender fees. Also, it provides HomeReady, Fannie Mae’s low down payment mortgage program, quick preapproval, and no application, origination, processing, or underwriting fees for first-time buyers. However, the disadvantages of this option include the absence of government-backed loans and the absence of branch locations.
Chase Bank
Chase is another lender with strong customer service ratings and J.D. Power rankings that are far above average. There are several financing choices available, and it offers a $5,000 Closing Guarantee that pays you $5,000 (terms apply). A mortgage rate discount is also available to Chase investors, both new and existing.
Veterans United Home Loans
Veterans United Home Loans has been recognized by J.D. Power and customers with outstanding ratings. This makes it one of the top choices for FHA loan lenders in July 2024, combined with its strong ratings for affordability and availability across the country. Additionally, this lender offers FHA loans in all U.S. states with various loan products which include conventional, jumbo, FHA, VA, USDA, and refinancing. Furthermore, it has credit requirements of 620 and down payment requirements of 3% and 3.5% respectively.
In this article, we evaluate various U.S. mortgages from online and brick-and-mortar banks, including large credit unions, to determine the best FHA loan lenders in July 2024. Furthermore, FHA loans require a credit score of 580 or higher for a 3.5% down payment and 500 or higher with a 10% down payment.