FHA Loans Idaho
If you're ready to put down roots in Idaho, you may be considering your financing options. As the average household income in Idaho is only $58,915, many residents won't have enough savings for a large down payment, and might find an FHA loan to be the best path to homeownership.
With the right FHA loan, you can enjoy affordable monthly mortgage payments while building equity in a piece of Idaho real estate. With numerous state and county assistance programs, lower down payments, and more lenient requirements, owning your own home in Idaho may not be a dream that’s as far away as you once thought.
Idaho FHA Loan
FHA loans are readily available in Idaho, with over 80,000 families in the state taking advantage of the program over the last decade to buy a new home. Idaho FHA loans were designed specifically to help residents achieve homeownership despite less-than-perfect credit scores or lower income. The federal government insures your FHA mortgage, which means lenders are able to give you better terms with more competitive interest rates.
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Idaho FHA Mortgage Loan Requirements
The Federal Housing Administration sets out a number of requirements and recommendations, as well as FHA loan limits each year. However, the requirements for FHA loans also vary by lender. The caveat is that they are more lenient than the requirements for conventional loans. So if you excel in one area — for example, you have a high down payment, you may be accepted even with a lower credit score.
Here are the requirements in more detail:
Here are the requirements in more detail:
Credit Score
Lenders consider credit score an indication of how likely a borrower is to make their monthly payment. Idaho borrowers typically need at least a 580 credit score to qualify for an FHA loan. Some Idaho FHA loans may allow credit scores as low as 500 with good income or a low debt-to-income (DTI) ratio. Higher credit scores can qualify you for a better interest rate and loan terms.
Down Payments
FHA loans require borrowers to pay a percentage of the loan via a down payment. Typical down payment requirements on FHA loans in Idaho are between 3.5% and 10%. If you have a credit score equal to or over 580, you can put down 3.5% of the loan amount. However, if it’s lower than that, you need a higher down payment.
Borrowers who have more savings might consider a larger down payment to get better interest rates. Unlike with traditional mortgages, the down payment money can be gifted by family members.
Personal Finances
Eligibility requirements for FHA loans in Idaho are less strict than with conventional loans, but lenders still prefer at least two years of employment history and a maximum of 57% debt-to-income (DTI) ratio.
Debt to income refers to how your gross income compares to your existing debt obligations. A higher DTI means you carry less debt and can easily cover mortgage payments. A lower DTI means you have less income to cover your monthly debt obligations, meaning lenders consider you a riskier borrower.
Closing Costs
Closing costs are the fees you pay to acquire and close an FHA home loan. Associated fees may include appraisal, title transfer, credit check, and lender costs, and on average, Idaho residents pay $9,254 in FHA closing fees.
While both the buyer and seller are required to pay closing costs in Idaho, the state does allow the seller to cover a portion of the buyer’s costs. Additionally, the seller pays all real estate agent commissions in Idaho, also helping to make homeownership more affordable for you.
Real Estate Market
The real estate market is a key factor when looking for an FHA home loan. This is because the FHA uses the information on housing prices to determine the maximum purchase price for the area.
Idaho buyers can expect a slightly less competitive real estate market than in the previous years but with steady prices. The median sale price for a home in Idaho in 2023 was $460,900, which is 3.5% more year-over-year, but still below the loan limit for the majority of the state. Homes are also selling faster than in previous years, with a median days on the market of 58 days, which is 12 less than the year before.
Some real estate markets in Idaho are experiencing record-high price increases, including Twin Falls and Coeur d’Alene. Rathdrum and Eagle, Idaho, are noticing a decrease in sales prices as high as 11%. Approximately 20% fewer homes are for sale in Idaho than the year before, which also makes it a more competitive market. Getting preapproved for an FHA loan can help Idaho buyers navigate this market more smoothly.
Idaho FHA Loan Limits
While the FHA program offers less strict lending requirements, this doesn't mean that everyone will qualify. Idaho buyers will still need to meet certain requirements to obtain a home loan.
Credit Score
While the average FICO score in Idaho is 729, higher than the national average, the statistic still fails to cover a significant portion of Idahoans with lower credit scores. Most Idaho buyers need at least a 580 credit score for an FHA loan, with 500 being the minimum. However, to ensure you can qualify for and afford your FHA mortgage, improve your score as much as possible before applying for a loan. And after you do, contact District Lending and get pre-qualified so you can start house hunting.
Quick Pre-Qualification with District Lending
A loan pre-qualification can set you apart from other Idaho buyers and help you secure your dream home faster. In other words, sellers are more likely to accept an offer from a buyer who has already begun the mortgage process. District Lending makes it easy to get pre-qualified, and getting a quote with us today won’t even impact your credit score.
Down Payment Requirements
The FHA loan program has a minimum down payment requirement of 3.5% of the purchase price for people with credit scores of 580 or over and 10% for those with lower scores. Payment assistance may be available to some borrowers, reducing the down payment even further.
Payment Assistance Programs in Idaho
Payment assistance programs in Idaho can help aspiring home buyers come up with the down payment or closing fees, depending on the organization and the program:
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The Idaho Housing and Finance Association
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The Idaho Housing’s First Loan Program
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The Native American Direct Loan
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Idaho Heroes
Local assistance programs are available in many counties, and the best way to connect to them or combine several programs is to contact your lender. VA loans are also available in Idaho, with zero down payment requirements for most borrowers.
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Mortgage Insurance
Most lenders require FHA mortgage insurance, which can consist of the annual and the upfront mortgage insurance premium. While the annual MIP varies depending on the loan size, term length, and the initial loan-to-value ratio, the upfront MIP is 1.75% of the loan amount. Idaho borrowers will need to show proof that they can cover the mortgage insurance payments in addition to their monthly mortgage payments.
FHA Loan Limits
The Federal Housing Administration (FHA) sets maximum loan limits based on the current year and specific Idaho county. The standard FHA loan limit for 2024 is $498,257 in most counties. However, some Idaho counties have higher FHA loan limits of up to $1,149,825 for single-family homes and $1,459,650 for a four-plex. Here are the limits for some of the most popular counties in Idaho:
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Ada – $586,500
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Bonner –$523,250
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Camas – $759,000
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Blaine – $759,000
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Boise – $586,500
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Canyon – $586,500
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Teton – $1,149,825
Higher FHA loan limits are available when purchasing two-, three- or four-unit properties. The FHA loan program also has other requirements for purchasing in Idaho, including appraisal and inspection. Since the FHA program aims to make homeownership more affordable, it requires that any property you purchase is in good condition and is worth the loan amount.
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How District Lending Can Help
District Lending is ready to help you purchase your new home in Idaho. Conventional mortgages aren’t for everyone, and an FHA loan can be an excellent alternative. Whether you have a unique income or require assistance with your down payment, we have options that can help. Whether you dream of a modern home in Boise or a small farmhouse in Twin Falls — District Lending has a program for you.
In addition to FHA and conventional loans, we also offer VA and jumbo lending and can help you refinance a loan. In the meantime, check out our online tools that can help turn interested shoppers into first-time homebuyers. Predict your monthly payment with our mortgage calculator, or submit your information to request a free quote.
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