FHA Loan Rates
How FHA loan rates are set, why they can be lower than conventional rates, and how mortgage insurance changes the true cost of an FHA mortgage.
Conventional benchmark: Freddie Mac weekly survey
Week of August 20, 2026Source: Freddie Mac Primary Mortgage Market Survey via FRED, updated August 20, 2026. National average survey rates, not an offer. Your rate will depend on credit score, loan-to-value, loan type, property and occupancy. Rates could change or not be available at commitment or closing. This product uses the FRED® API but is not endorsed or certified by the Federal Reserve Bank of St. Louis.
How FHA Loan pricing relates to this benchmark. Freddie Mac's survey covers conventional conforming loans only, so the figures above are a benchmark rather than an FHA rate. FHA note rates are quoted separately and often sit below the conventional survey because government insurance shifts default risk away from the lender; the trade-off is FHA's upfront and monthly mortgage insurance, which pushes the APR above the note rate. The "30 Yr. FHA" row in the daily index below is the closest published national figure.
Daily rate-lock index (OBMMI)
Updated daily by providerIndex data © Optimal Blue, LLC. Optimal Blue Mortgage Market Indices.
Source: Optimal Blue Mortgage Market Indices (OBMMI), updated August 26, 2026. National average survey rates, not an offer. Your rate will depend on credit score, loan-to-value, loan type, property and occupancy. Rates could change or not be available at commitment or closing.
Daily index — see the "30 Yr. FHA" row
Updated daily by providerSource: Mortgage News Daily rate index, updated August 26, 2026. National average survey rates, not an offer. Your rate will depend on credit score, loan-to-value, loan type, property and occupancy. Rates could change or not be available at commitment or closing.
How FHA Loan rates are set
FHA loans are insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development. The insurance protects the lender if a borrower defaults, which allows lenders to approve borrowers with smaller down payments (as little as 3.5 percent) and more flexible credit histories than conventional guidelines require. FHA loans are originated by private lenders, not by the government itself.
FHA note rates are frequently a little lower than conventional rates for the same borrower, especially for borrowers with credit scores in the 600s. That is because Ginnie Mae securities, which back FHA and VA loans, carry a full-faith-and-credit government guarantee and trade at slightly lower yields. FHA pricing also uses far fewer credit-score and loan-to-value adjustments than conventional pricing.
The lower rate comes with mortgage insurance premiums (MIP). There is an upfront premium that is usually financed into the loan and an annual premium paid monthly. For most borrowers who put down less than 10 percent, the annual MIP stays for the life of the loan, so the all-in cost can be higher than a conventional loan even though the rate is lower. Comparing the APR and the monthly payment, not just the note rate, is essential.
FHA loan amounts are capped by county. The limits are set annually as a percentage of the conforming limit and are higher in high-cost areas. The property must meet FHA minimum property standards, which are checked during the appraisal, and the home must be the borrower's primary residence. FHA also has specific rules for condominiums; the project usually needs to be FHA-approved or eligible for single-unit approval.
Many FHA borrowers plan to refinance into a conventional loan once they have built enough equity to drop the mortgage insurance. Others use the FHA streamline refinance later to lower their rate with limited documentation. The right path depends on how long you expect to keep the home and how your credit and equity evolve.
Rates shown could change or may not be available at commitment or closing.
FHA Loan Rates: common questions
Are FHA rates lower than conventional rates?
Often, yes, particularly for borrowers with mid-range credit scores. But FHA mortgage insurance adds to the monthly cost, so the total payment can still be higher. Compare APR and full payment.
What credit score does FHA require?
FHA allows 3.5 percent down with a score of 580 or higher and 10 percent down with a score between 500 and 579. Individual lenders often set their own higher minimums.
Can FHA mortgage insurance be removed?
If you put down less than 10 percent, the annual MIP lasts for the life of the loan. With 10 percent or more down it drops after 11 years. Refinancing into a conventional loan is the usual way to eliminate it earlier.
Can I use an FHA loan for a condo in Florida?
Yes, if the condominium project is FHA-approved or the unit qualifies for single-unit approval. Coastal Florida projects with reserve, insurance or litigation issues can be harder to approve.