FHA Government-Insured Loans: As Little as 3.5% Down
We are FHA specialists! Explore financing for an eligible owner-occupied home in Westchester County through an FHA-approved lender.
A 3.5% down payment may qualify you for FHA financing when you meet the credit, income, property, and lender requirements. FHA insures the loan; an FHA-approved lender makes the loan and determines approval.
2026 FHA Loan Limits for Westchester County
Effective for FHA case numbers assigned on or after January 1, 2026.
| Property Type | Maximum Base Loan |
|---|---|
| Single-family home, eligible condo, or one-unit townhouse | $1,249,125 |
| Two-family home | $1,599,375 |
| Three-family home | $1,933,200 |
| Four-family home | $2,402,625 |
These are loan limits, not purchase-price limits. Financed upfront mortgage insurance may be added above the base-loan limit. Condominiums must satisfy FHA project-approval or applicable single-unit approval requirements.
How Do I Qualify?
This is a full-documentation loan. The lender must verify your qualifying income, assets, credit, debts, and the property's eligibility.
Employment & Income
Expect the lender to review your income and employment history, generally covering the past two years. You do not necessarily need 24 months with the same employer or in the same field.
Job changes, self-employment, gaps, and other eligible income sources are evaluated under the applicable documentation and stability rules.
Down Payment
For maximum FHA purchase financing, the minimum down payment is 3.5% of the FHA-adjusted property value, generally the lower of the purchase price or appraised value. Gifts from eligible sources may be acceptable with proper documentation.
Example: A $750,000 purchase with an appraisal of at least $750,000 requires a minimum $26,250 down payment. The base loan would be $723,750, before any financed upfront mortgage insurance.
Credit Score
FHA permits maximum financing with a qualifying credit score of 580 or higher. Scores from 500 to 579 are limited to 90% financing, generally requiring at least 10% down.
Lenders may set higher credit-score requirements. A qualifying score alone does not guarantee approval.
Reserves After Closing
Reserve requirements depend on the property, underwriting method, and lender. A two-month requirement does not apply to every FHA borrower.
For manual underwriting, FHA generally requires one month's PITI reserves for one- to two-unit homes and three months for three- to four-unit homes. Three- to four-unit homes also require three months under FHA's automated underwriting policy.
Eligible investment or retirement assets may count, subject to the lender's verification and access rules. PITI means principal, interest, taxes, and insurance.
Closing Costs & Mortgage Insurance
Budgeting estimate: Allowing around 5-6% of the loan amount may be useful for initial planning, but this is not an FHA rule or a guaranteed cost. Actual costs depend on the loan, lender, property taxes, insurance, and transaction. Ask for an itemized Loan Estimate. The down payment is separate.
Closing costs and prepaid items may include:
- FHA upfront mortgage insurance: generally 1.75% of the base loan amount
- Title search and title insurance
- Hazard insurance and insurance escrow
- Property tax escrow
- Attorney fees
- Appraisal fees
- Mortgage recording tax, where applicable
- Recording and filing fees
- Lender charges and discount points, if applicable
The upfront mortgage insurance premium may be financed into the loan. FHA also charges an annual mortgage insurance premium, typically collected with the monthly payment; its amount and duration depend on the loan.
Seller contributions: The seller and other interested parties may contribute up to 6% of the sale price toward eligible closing costs, prepaid expenses, and financing concessions, subject to actual eligible costs. These contributions cannot satisfy your required down payment.
Frequently Asked Questions
Who can apply?
First-time buyers and repeat buyers may apply for an eligible owner-occupied home. For a two- to four-unit property, you must occupy one of the units. The lender will confirm your eligibility and the property requirements.
How much of my income can go toward housing and debts?
FHA uses 31% for housing expenses and 43% for total monthly debts as standard manual-underwriting benchmarks. These are not absolute limits for every borrower. Higher ratios may be acceptable with qualifying compensating factors or an acceptable automated-underwriting result, subject to lender requirements. Housing expenses include principal and interest, property taxes, insurance, mortgage insurance, and applicable association dues.
What if I have had a bankruptcy?
Chapter 7 generally requires at least two years after discharge, with reestablished credit or no new credit obligations. Limited exceptions may allow consideration after at least 12 months when qualifying extenuating circumstances are documented. Chapter 13 may be considered after at least 12 months of satisfactory, on-time plan payments and written bankruptcy-court permission. Approval depends on the full file and applicable underwriting requirements.
Why does FHA allow lower down payments and credit scores?
FHA mortgage insurance helps approved lenders offer financing with lower down payments and more flexible credit standards. Borrowers must still document their finances and demonstrate the ability to repay. FHA mortgage insurance protects the lender against covered losses; it does not replace borrower qualification.
What will my interest rate and payment be?
Rates are set by lenders and depend on your qualifications, loan terms, and market conditions. Ask about fixed-rate options and compare written Loan Estimates, including mortgage insurance and closing costs. On a fixed-rate loan, the interest rate and scheduled principal-and-interest payment stay fixed. Property taxes, homeowners insurance, association charges, and other parts of your total housing expense can change.
Why consider an FHA loan in Westchester?
The county loan limits allow FHA financing for a range of eligible local homes. A lower down payment can help qualified buyers preserve cash, but compare the total cost, mortgage insurance, and property eligibility with conventional financing before choosing.
What if the property needs major repairs or is a foreclosure?
An FHA 203(k) rehabilitation loan may combine the purchase and eligible repairs into one mortgage. A missing kitchen, failed heating system, or roof problem requires lender review of the property, repair plan, costs, and appraisal. The lender determines whether Standard or Limited 203(k) financing is appropriate. Repair financing is subject to program rules and approval; it is not automatic.
What if I have more questions?
Contact CS Realty for help exploring homes and the FHA purchase process. An FHA-approved lender can confirm the loan terms and underwriting requirements for your situation.
Explore Your FHA Options
Let us help you find a home and connect with the right lending resources.
Official resources: FHA loan information | FHA county loan limits | HUD Handbook 4000.1. Information reviewed October 12, 2026.