Best FHA Lenders of 2021

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The Federal Housing Administration (FHA) is a government agency charged with improving housing standards and ensuring fair and high-quality financing systems for both first-time and existing homeowners. One of the agency's major initiatives is the FHA loan program, which offers affordable mortgages with reasonable down payments. 

While FHA loans are part of a government program, you don’t get the loan directly from the government. Instead, loans come from an FHA lender that works with the government program. Before deciding on a lender, be sure to shop around for the best lender for your unique needs. Here are the top FHA lenders offering FHA loans to borrowers like you.

Best FHA Lenders of 2021

Best Overall : Rocket Mortgage


Rocket Mortgage

Rocket Mortgage

Quicken Loans is the largest mortgage lender in America, originating 541,000 loans in 2019. It offers its home loans through Rocket Mortgage, which J.D. Power ranked as the top mortgage platform for customer service in 2020.

After testing out several online mortgage applications, this one arose as a clear winner thanks to an ability to link online bank accounts to prove funds, easy-to-understand menus and prompts, and a quick, paperless approval process.

You don’t get the same personal service with an online lender as an offline one, but if that leads to saving time and money, you may prefer the online experience over an in-person one. And, while the primary experience is online, you can call Rocket Mortgage’s customer support for help if needed.

What We Like
  • An easy-to-use online application process

  • A reputable, high-volume mortgage lender

  • Estimated loan approval takes just a few minutes

What We Don't Like
  • No in-person customer service

Best Traditional Bank : Chase


Chase bank logo

Courtesy of JP Morgan Bank

Among the largest national banks with brick-and-mortar branches, Chase stands out as a good choice for FHA loans because it offers some FHA borrowers a $2,500 Chase Homebuyer Grant through its DreaMaker program.

Chase operates more than 4,700 branches, which gives you plenty of locations for in-person customer service and help applying. But Chase also offers an online and mobile experience, making it an all-around good choice for strong customer service options.

What We Like
  • More than 4,700 branch locations for in-person customer support

  • $2,500 grant toward closing costs or a lower interest rate may be available

What We Don't Like
  • Branches not available in all states

  • $2,500 grant cannot be used for a down payment

Best for Self-Employed : New American Funding


New American Funding

 New American Funding

If you have variable income due to self-employment, a short credit history but good income, or any other combination of factors that might make your application a little tougher to approve, New American Funding should be high on your list.

While you’ll still need to meet the FHA loan credit score and down payment requirements, New American Funding is a bit more flexible when it comes to approvals. The company may give applications a manual review, which might give you better approval odds than a purely computerized loan underwriting process.

While New American is a leader in its underwriting for some applicants, it doesn’t offer the strongest digital experience. But if you are self-employed and struggle to meet mortgage criteria elsewhere, putting up with subpar online systems may be well worth it.

What We Like
  • Manual review may make it easier to get approved with irregular income

  • Ability to start your application online and finish with the support of a lending team

What We Don't Like
  • Poor online experience compared to some competitors

Best for Poor Credit : Carrington


carrington companies logo

Courtesy of Carrington Mortgage

Carrington is willing to lend to borrowers who meet the FHA’s minimum credit score requirement of 500. That makes Carrington a top choice for borrowers struggling for approval because of negative marks on their credit report. While borrowers with high credit scores can save by looking elsewhere, Carrington is a good lender of last resort for lower-credit applicants.

While you can expect to pay higher interest rates if your credit scores are in the 500s, it may be worth it to get your foot in the door of homeownership provided you can manage the mortgage terms. If you are worried about high rates due to your credit history, speak to your mortgage officer about options to add a co-borrower, get a gift for down payment funds, and other opportunities the FHA program gives you.

What We Like
  • Loans available for those with less than perfect credit

  • May consider non-traditional financial and credit data for approval

What We Don't Like
  • No online application

Compare Providers

Lender Why We Picked It Standout Feature
Rocket Mortgage Best Overall Lender Easy online applications
Chase Best Traditional Bank Large branch network and a good online and mobile experience
New American Funding Best for Self-Employed Easier to get approved with non-traditional income
Carrington Best for Poor Credit May consider non-traditional financial and credit information

Frequently Asked Questions

What Is an FHA Loan?

FHA loans are a type of mortgage loan backed by the Federal Housing Administration. The FHA gives borrowers an opportunity to buy a home with a low down payment and less stringent requirements than traditional mortgage loans. Because the federal government guarantees these loans, FHA lenders are willing to lend to you at a competitive rate. 

What Credit Score Do I Need to Borrow From an FHA Lender?

To qualify for an FHA loan, you have to meet some minimum credit requirements. FHA loans are available for borrowers with credit scores as low as 500, though you’ll need at least a 580 to qualify for a 3.5% down payment. With a 500 to 579 credit score, you’ll have to put down 10% on a home purchase.

How Should I Choose the Best FHA Lender for Me?

Each FHA lender may have a different rate or fees that you should take into account. Other considerations include customer service, physical locations, and the typical customer they work with. For example, someone who’s self-employed may want to choose a different company than someone with a traditional job.

It’s best to shop around for a lender that offers you low costs with good customer service through the channels (e.g. online or in-person) that are most important to you.

How We Picked the Best FHA Lenders

To choose the best FHA lenders, we reviewed more than a dozen different banks, credit unions, and online lenders. The most important areas reviewed included interest rates and fees, ease of applying for a loan, customer support options, and unique features important to borrowers in each specified category.

Article Sources

  1. J.D. Power. "Record Low Interest Rates Mask Underlying Problems in Mortgage Industry, J.D. Power Finds." Accessed Feb. 3, 2021.

  2. CFPB. "Data Point: 2019 Mortgage Market Activity and Trends." Page 62. Accessed Feb. 3, 2021.

  3. Chase. "Affordable Mortgage Options." Accessed Feb. 3, 2021.

  4. Chase. "About Chase Bank." Accessed Feb. 3, 2021.

  5. FDIC. "203(b) Mortgage Insurance Program." Page 2. Accessed Feb. 3, 2021.