FHA Loans and Down Payment Assistance, Explained
An FHA loan is a mortgage insured by the Federal Housing Administration that lets qualified buyers put down as little as 3.5%, well below the 20% often assumed necessary. FHA loans also have county-based loan limits, from a 2026 one-unit national floor of $541,287 up to a $1,249,125 ceiling in high-cost areas (HUD Mortgagee Letter 2025-23, as of November 2026). Many first-time buyers pair an FHA loan with a state or local down payment assistance (DPA) program, which can cover part or all of the required down payment through a grant or low-interest second loan, usually available to buyers under certain income limits. This calculator estimates your maximum FHA loan amount, the minimum down payment required, a representative down payment assistance amount, and the resulting out-of-pocket cash you'd still need at closing.
How It's Calculated
| Step | Item | Formula |
|---|---|---|
| 1 | Max FHA Loan | Lesser of 96.5% of price or area loan limit |
| 2 | Min Down Payment | Purchase price × 3.5% |
| 3 | DPA Estimate | Price × income-tiered assistance rate |
| 4 | Out-of-Pocket | Min down payment − DPA amount |
Frequently Asked Questions
No — programs are run by state or local agencies with their own income limits and requirements, and availability varies widely by location.
MIP protects the lender given the low down payment. You pay an upfront premium plus an ongoing annual premium, usually rolled into your monthly payment.
※ Reference estimate only. Actual loan limits, DPA eligibility, and insurance rates depend on your county, lender, and program. Consult a mortgage professional.