Current FHA guidelines, updated from one source.
The figures below are the FHA program’s own parameters, read from Lendmire’s centralized guideline source and refreshed on this page as HUD’s rules and the wholesale overlays change: the minimum investment, the decision score for maximum financing, the mortgage insurance premiums, and the qualifying ratios.
Up to 96.5% loan-to-value on a purchase
The purchase leverage is 96.5% loan-to-value, which means the buyer brings a 3.5% minimum investment on the lesser of price and value; closing costs are separate, and sellers may help with those.
Decision score for maximum financing
The program opens at a 580 decision score for maximum financing; borrowers without a usable score are eligible under manual underwriting on non-traditional credit, and the ratios then follow the manual ladder below.
Plus 0.50%–0.55% a year on most thirty-year loans
1.75% upfront plus 0.50%–0.55% a year on most thirty-year loans is the price of the leverage; larger base loans carry a higher annual tier, fifteen-year loans a lower one, and the calculator applies HUD’s schedule to the figures you enter.
Housing and total debt, manual reference
The manual-underwriting reference ratios are 31/43 for housing and total debt; with documented compensating factors the ladder below stretches them, and automated underwriting commonly allows more than the manual reference.
| Decision score | Housing / total | Compensating factors |
|---|---|---|
| 500–579 or no credit score | 31% / 43% | not applicable — ratios may not exceed 31/43 (energy efficient homes 33/45) |
| 580 and above | 31% / 43% | no compensating factors required (energy efficient homes 33/45) |
| 580 and above | 37% / 47% | one of: verified and documented cash reserves; minimal increase in housing payment; residual income |
| 580 and above | 40% / 40% | no discretionary debt |
| 580 and above | 40% / 50% | two of: verified cash reserves; minimal increase in housing payment; significant additional income not reflected in effective income; residual income |
| Base loan | Leverage | Annual premium | Duration |
|---|---|---|---|
| Standard base loan amounts | at or below 90% LTV | 0.50% | 11 years |
| Standard base loan amounts | above 90% to 95% LTV | 0.50% | mortgage term |
| Standard base loan amounts | above 95% LTV | 0.55% | mortgage term |
| Larger base loan amounts | at or below 90% LTV | 0.70% | 11 years |
| Larger base loan amounts | above 90% to 95% LTV | 0.70% | mortgage term |
| Larger base loan amounts | above 95% LTV | 0.75% | mortgage term |
Refinances: rate-and-term to 97.75% loan-to-value on a home occupied for the past year; cash-out to 80% after twelve months of ownership and occupancy; streamline refinances of an existing FHA loan without an appraisal. Sellers and other interested parties may contribute up to 6% of the price toward closing costs; the entire minimum investment may be a gift.
Current FHA snapshot · updated October 1, 2026 · owner-occupied principal residences, one to four units · county loan limits apply — ask a Lendmire loan officer for the limit where you are buying · FHA loans are assumable · Lendmire is not affiliated with FHA or HUD.
Not a commitment to lend, not an offer of credit, not a quote. The figures shown are current FHA program parameters and wholesale overlays that change without notice and apply only after full underwriting of the borrower and the property; county loan limits apply and are confirmed by a loan officer. Rates, payments, and costs are provided in writing by a licensed loan officer. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government. Lendmire, LLC, NMLS #2371349. Equal Housing Opportunity.
What an FHA loan is — and how the file is qualified.
An FHA loan is a conventional-looking mortgage with a federal insurance policy attached: HUD insures the lender against loss, and in exchange the program sets the minimum investment, the credit rules, the premiums, and the ratios. The four cards below cover each piece as it applies to a Durham file.
For the program overview, see Lendmire’s FHA loan program, or the statewide guide at FHA Loans in North Carolina.
The minimum required investment
HUD requires the buyer to invest a set share of the lesser of the price and the appraised value; the loan covers the rest. On a Durham purchase the investment can be the buyer’s own savings, a gift from a family member or another acceptable donor, or approved secondary financing, and closing costs are separate from it.
The decision score sets the leverage
The decision score is the lowest of the borrowers’ middle scores. At the maximum-financing threshold and above, a Durham buyer reaches the full purchase leverage; HUD allows lower scores at reduced leverage, but the wholesale programs behind these pages start at the threshold, so that is the practical floor.
Two premiums: upfront and annual
Two numbers to know: the upfront premium added to the loan at closing, and the annual premium paid monthly. The schedule in the snapshot shows how the annual premium steps with leverage and loan size, and the calculator applies it to a Durham price.
Qualifying ratios and compensating factors
Effective income is the income the lender can document as stable and likely to continue, and the ratios are measured against it. A Durham buyer with a modest score is held to the base ratios; above the maximum-financing score the compensating factors open the higher tiers.
The result is an estimate, not a decision: the appraisal may land below the contract price, the lender sets the rate at lock, and the ratios are measured on effective income. What does not change is the program structure the calculator reproduces.
Where Durham’s first-time and moderate-income buyers shop — and how FHA fits.
Durham home values, the share of households that own, and household incomes set the stage for an FHA file: they decide the typical minimum investment and the typical payment. The figures come from the U.S. Census Bureau.
Read the figures as backdrop. A high median value means a larger minimum investment and a larger premium in dollars; a modest median value means a file that clears the county limit easily. Neither changes the program’s percentages, only what they amount to.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Distinct Durham neighborhoods, distinct FHA files.
The six Durham submarkets below show where FHA buyers shop and what a file there turns on: the property type the appraiser sees, the approval it needs, and the price the ratios have to carry.
Two-to-four-unit homes
Durham duplexes and small multi-unit homes are FHA purchases at the same minimum investment as a house when the buyer occupies one unit. Rental income from the other units counts within HUD’s rules, and three- and four-unit homes face a self-sufficiency test on the rents. Durham counts a population near 291K within the Durham-Chapel Hill, NC area.
Newer infill and recent construction
Infill rows and newer Durham construction appraise cleanly under HUD’s standards, and the question there is price: a contract near the county limit needs the limit confirmed before the offer, and a larger investment where the price runs past it. The median owner-occupied home value in Durham runs near $392,800 on the latest Census estimate.
Established close-in neighborhoods
Older Durham homes are well inside the program, with one recurring question: HUD’s minimum property requirements. A home that needs repairs to meet them closes after the repairs or through a repair escrow where permitted. About 48% of Durham’s households rent — roughly 60,347 renter households on the latest Census estimate.
Higher-value homes
A high-value Durham purchase can still be an FHA file when the loan amount fits under the county limit; above it, the program’s leverage is not available and the comparison with conventional financing decides. On a home at Durham’s median value, the FHA minimum investment comes to about $13,700 — the cash the program asks a buyer to bring before closing costs.
Condominiums and townhomes
A Durham townhome or condominium is a routine FHA file once the project question is answered. Approved projects and single-unit approvals both work; a project with neither sends the buyer to a conventional loan. Roughly 66,203 Durham households own their homes on the latest Census estimate — 52% of all households, the pool an FHA purchase joins.
Historic districts
Durham’s historic neighborhoods are where FHA appraisals most often return required repairs: older systems, lead-era paint, and deferred maintenance all touch HUD’s property standards. Repairs are completed before closing or escrowed where the program permits. Median household income in Durham sits near $81,619 on the latest Census estimate.
The property drives the file as much as the credit: the program accepts houses, condominiums in approved projects, planned developments, manufactured homes meeting HUD rules, and owner-occupied homes of up to four units, while second homes and rentals are outside it.
Four ways Durham buyers put an FHA loan to work.
Because FHA insures the lender, it fits the Durham borrower who has the income for the payment but not the profile a conventional loan asks for. Four examples follow.
Buy a first home with the minimum investment
The most common Durham FHA file: a buyer with steady income, a modest down payment that may be a gift, and a decision score at or above the threshold for maximum financing. The seller can help with closing costs, and the ratios allow for a documented compensating factor.
Buy on a recovering credit profile
A Durham buyer whose credit has recovered from a bankruptcy, a foreclosure, or a stretch of late payments can qualify once the event is seasoned under HUD’s rules and the recent history is clean; the decision score sets the leverage and the ratios follow the manual ladder.
Buy a condominium in an approved project
Condominiums are a common first purchase in Durham, and FHA finances them in approved projects or through single-unit approval. The approval question is handled on the lender’s side; the buyer’s file is the same as for a house.
Take cash out of a home with equity
The cash-out refinance replaces the Durham home’s first mortgage with a larger FHA loan and hands over the difference, after twelve months of occupancy and with the premiums applied to the new loan; the ratios and the payment history decide the file.
Estimate the FHA payment on a Durham price before requesting a quote.
Estimate the payment before you ask for a quote: the Durham price, the down payment, the term, the rate, and the escrows are the inputs, and the minimum investment and the premium schedule come from the same guideline source as the snapshot. The result is an estimate, and the rate shown is a published market benchmark, not an FHA offer.
Durham FHA payment estimate
Starting assumptions reflect a typical Durham price and the FHA minimum investment. Replace them with your own figures.
Editable benchmark: 7.03% as of September 24, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA loan quote.
Illustrative starting assumptions: a $395,000 price near Durham’s median owner-occupied home value (kept where an FHA loan is realistic in most counties), the FHA minimum investment as the down payment, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for North Carolina (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not an FHA loan quote; your rate is set by the lender at lock. FHA mortgage insurance follows HUD’s published schedule for the term, leverage and loan size entered; taxes, insurance and dues are editable estimates; closing costs are not included; county loan limits are not checked here. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government.
Same buyer, three very different closings.
The same buyer can often close three ways, and the structures differ more than the headlines suggest: FHA with its insurance schedule, a conventional loan with private mortgage insurance that cancels, or a VA loan for an eligible borrower with no mortgage insurance at all.
FHA, conventional with mortgage insurance, or VA.
FHA fits the Durham buyer whose profile a conventional file would turn away or price heavily: the leverage is high, the score threshold is low, and the premiums do not rise with a weaker score. The cost is insurance that stays for the term at full leverage.
Where FHA charges by schedule, conventional charges by score. A Durham buyer with strong credit and a small down payment may find the private premium smaller and the payment lower; a buyer with a modest score will not. See Lendmire’s conventional loan program.
VA undercuts FHA for the eligible borrower on the recurring costs: no investment, no monthly premium, no upfront premium, with a one-time funding fee in their place. The questions are eligibility, entitlement, and whether the home meets VA’s property standards. See Lendmire’s VA loan program.
The decision is rarely close once the profile is known. FHA tends to fit the modest score, conventional the strong score with equity to come, and VA nearly any file with eligibility. The comparison is run on the actual numbers, in writing.
What to prepare for a Durham scenario review.
An FHA file is documented more fully than a streamline refinance; the items below are what a Durham scenario review typically draws on.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, the credit profile, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
Most surprises on a Durham FHA file trace back to one of these: a decision score that landed differently than expected, an appraisal with required repairs, a condominium without approval, or a county limit lower than the contract price.
Use these checks to keep the Durham file clean and fundable.
A clean Durham file answers three questions in advance: what decision score, what premium schedule, and whether the property is inside HUD’s rules and the county limit.
- Confirm the score: the threshold in the snapshot opens maximum financing and the ratio ladder.
- Know the premium: the exit from the premium is a refinance, not an equity threshold.
- Match the occupancy: at least one borrower occupies the home within two months and for at least a year.
The decision score decides the leverage
The score the program uses is the lender’s, not an app’s. A Durham file lands on maximum financing at the threshold shown in the snapshot, and the threshold is also where the compensating-factor ladder opens; below it the ratios are held to the base table.
How long the annual premium runs
Unlike private mortgage insurance, the FHA annual premium does not cancel as the home gains value. On a Durham full-leverage loan the exit is a refinance; the calculator shows the premium’s rate and duration for the leverage entered.
Occupancy and the non-occupying co-borrower
FHA loans are for owner-occupied principal residences: at least one borrower moves in within two months of closing and stays at least a year. A Durham parent helping an adult child can sign as a non-occupying co-borrower under HUD’s family rules, at full leverage on a single-unit home.
Seller contributions and the minimum investment
A Durham contract can shift most of the closing costs to the seller within the program’s limit, which leaves the buyer bringing the minimum investment and little else. The investment must be the buyer’s own or a gift; the contributions cover the rest.
The appraisal and HUD’s property standards
The appraiser on a Durham FHA file is on HUD’s roster and reports on condition as well as value. Required repairs are common on older homes and are usually settled by the seller before closing; where they cannot be, the file may not close as an FHA loan.
From a Durham pre-approval to keys in hand.
Four steps, each with an FHA rule inside it: the pre-approval, the appraisal, the underwriting, and the closing. Here is the Durham path.
Pre-approval
A Durham pre-approval is a sizing exercise: the score, the income, the investment, and the county limit. The loan officer confirms eligibility against the program rules and puts the pre-approval in writing for the offer.
Contract and appraisal
The appraisal is the FHA step that surprises buyers most: it reports on condition as well as value. Required repairs are negotiated with the seller, and a low value raises the investment; the Durham contract is adjusted or the file moves on.
Underwriting
The file is scored by HUD’s automated system or underwritten manually, with income, assets, credit, and any compensating factors documented. Seasoning after a credit event is confirmed from the discharge or transfer papers, and the ratios are measured on effective income.
Closing
At closing the upfront premium is added to the loan, the escrows for taxes and insurance are set up, and the annual premium begins with the first payment. A Durham buyer signs the note and the security instrument, occupies the home within HUD’s window, and the loan is insured.
A brokerage that matches the program to the buyer.
A brokerage sees several wholesale programs and all three government and agency routes; a single lender sees its own. For a Durham buyer that difference shows up in which program is recommended, because Lendmire runs them side by side and says which one costs less.
Three programs, one set of numbers
The comparison on this page is run for real on every Durham file: the FHA structure next to conventional with private insurance and, where eligibility exists, VA. The written terms follow the comparison.
The premium explained before the offer
The insurance structure is the program’s cost, and Lendmire treats it as the first thing to explain rather than the last: how much, how long, and when a refinance would remove it for a Durham buyer.
Licensed, consumer-purpose, in writing
The parameters on this page are HUD’s and the wholesale overlays’; the terms for a specific Durham loan come from a licensed loan officer, in writing, after the review. Lendmire is a broker, never the lender, and not affiliated with the federal government.
Trusted by first-time buyers & families alike.
Durham FHA loan FAQs
What an FHA loan is, how much it takes to buy, what score it needs, what the mortgage insurance costs, and how the county limit works, answered for Durham buyers.
What is an FHA loan, and who is it for?
An FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD: the lender makes the loan, HUD insures it against loss, and in exchange the program sets a small minimum investment, a forgiving credit threshold, ratios that stretch with compensating factors, and mortgage insurance premiums that fund the insurance. It is for owner-occupied homes of one to four units.
How much do I need to put down on an FHA loan in Durham?
The minimum required investment shown in the snapshot, measured on the lesser of the purchase price and the appraised value. It can be the buyer’s own funds, an acceptable gift, or approved secondary financing, and closing costs are separate; a seller may contribute toward those up to the program’s limit.
What credit score do I need for an FHA loan?
The threshold in the snapshot, read as the lowest middle score among the borrowers. Below it HUD allows a reduced-leverage loan, but the programs Lendmire places FHA loans with begin at the threshold. A thin or non-traditional credit file can qualify under manual underwriting.
How does FHA mortgage insurance work, and how long do I pay it?
Two parts, both in the snapshot: the upfront premium on the base loan and the annual premium on most thirty-year loans. The duration is the detail to know before the contract: eleven years at or below ninety percent leverage, the loan term above it.
What is the FHA loan limit in Durham?
The limit is set by county and revised each year, so ask a loan officer for the current figure where you are buying. It caps the loan, not the price: a Durham buyer above the limit brings the difference as a larger investment or moves to a conventional loan.
What debt-to-income ratio does FHA allow?
FHA’s ratios are a ladder rather than a single cap, and the snapshot shows every rung with the factor that opens it. An automated approval can exceed the manual table; a manual file follows it exactly.
Can the down payment be a gift?
Yes, for all of it. The donor must be acceptable under HUD’s rules, the letter must state no repayment is expected, and the transfer must be documented; the seller cannot be the source of the investment.
What happens after my Durham offer is accepted?
The Durham contract goes to the lender, the appraisal is ordered from an FHA Roster appraiser, and underwriting follows. Required repairs or a low value are the usual detours; a loan officer keeps the timeline realistic.
What does an FHA appraisal check?
Value and condition. An FHA Roster appraiser values the home and checks it against HUD’s minimum property requirements for safety, soundness, and security; required repairs are completed before closing or through a repair escrow where permitted. A value below the contract price raises the buyer’s investment.
Can I get an FHA loan after a bankruptcy or foreclosure?
FHA is often the first program available after a bankruptcy or foreclosure. The seasoning rules are specific, the exceptions are real, and recent housing lates are the thing the program does not forgive.
Run the Durham FHA numbers, then get the terms in writing.
Ready when you are: a Durham review sizes the loan, settles the program, and delivers the written terms. Nothing on this page is a commitment to lend.
This guide covers Durham — for the statewide guidelines, markets, and scenarios, see FHA Loans in North Carolina, part of Lendmire’s FHA loan program.
Nearby markets in North Carolina: Cary · Raleigh · Greensboro · Winston-Salem · Charlotte
Related programs: Down Payment Assistance · FHA 203(k) Rehab Loans · Conventional Loans