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FHA Loans for Real Estate Investor Financing

FHA Loans for Real Estate Investor Financing

Securing an FHA (Federal Housing Administration) Loan could be an ideal strategy for your investment property.

The FHA is a program by the U.S. government that insures bank mortgages.

Good News About FHA Loans

The good news about FHA loans is that they usually come with a lower down payment, which is 3.5% in 2021, and less restrictive qualification requirements. This is great news because investors don’t need to come up with 20% in cash to put as a down payment on the house.

FHA loans also come with low, fixed interest rates for 30 years, which is 3.540% in 2021.

Bad News About FHA Financing

The downside to FHA backed loans is that the fees for these programs can be higher than others, you can experience a slower closing than some other options, and the deals are usually limited to one at a time.

Another big downside to real estate investors looking to secure an FHA loan is that they come with an additional payment in the form of Private Mortgage Insurance (PMI) when the down payment is less than 20%. If you put down a full 20% on the deal, you don’t pay this PMI, if not, you have to pay it.

This causes a significant increase in costs and thus, a reduction in potential positive cashflow for real estate investors.

What’s more, and this is the biggie for aggressive growth investors, FHA loans can only be used if you will live in the property. In other words, you can’t get an FHA loan for a pure investment property that you don’t plan to live in.

Still another downside to FHA loans is that you can only secure one at a time and major rehab properties don’t qualify.

When FHA Loans Work Best

Now, you can use an FHA loan to secure a duplex, triplex, or fourplex property as long as you will live in one of the units.

So, for real estate investment purposes, FHA loans are a go-to loan option for investors planning on buying a multi-unit property where they live in one unit and rent out or sell the other units.

Finding An FHA Loan

You can shop for an FHA loan at your local bank or credit union, as well as large mortgage lending companies.

Would you like a personal consultation on the best financing option for your unique situation?

You can start by scheduling your PROPERTY PROFITS STRATEGY SESSION.

In This FREE 1 Hour Session, an expert real estate investment coach from our team will work personally with you to...

  • Examine your current real estate investment portfolio/plans to see what’s working and what’s hurting. Discover where you’re making money and losing it.
  • Search for the diamonds in your backyard, the low-hanging profit opportunities that can be made with minor tweaks.
  • Diagnose the biggest roadblock to scaling your business fast and profitably.
  • Present the best path for tweaking your investment game-plan so you can build wealth faster, with more predictability and stability.


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