FHA Approved Mortgage Lenders - National Directory

To search our directory of FHA approved lenders, please select the state or territory in which the property you wish to renovate is located:


FHA stands for Federal Housing Administration. It was created by congress in 1934, right after the great depression, with a mandate to enhance homeownership. Back then, less than 40% of the people actually owned the homes they were living in.

FHA does not directly originate or fund mortgage loans. Instead, they act as an insurer against any losses a FHA approved lender might incur on a mortgage written according to the FHA's guidelines. In order to maintain the corpus needed to run this home loan insurance program, the agency charges a small insurance premium to the borrowers obtaining financing through a FHA insured mortgage.

The down payment requirements for borrowers opting for FHA loans are quite minimal. With as little as 3.5%, a new home can be purchased with financing from a FHA lender. Moreover, the credit, income and other qualifying guidelines are also quite reasonable and suit a wide spectrum of residential loan seekers.

If you think you may not qualify for residential home financing because you have limited amount of down payment funds, lower income, higher debt or spotty credit, you may be not aware of the FHA mortgage programs or their requirements. In addition to providing extremely flexible lending guidelines, FHA lenders also provide lower rates on most standard loan programs such as the 30-year fixed loan. Even in high cost areas, the minimum down payment requirement is just 3.5% for loan amounts up to $729,750. Considering all these amazing features associated with FHA financing, you may be wondering about the steps you need to take to find FHA lenders to handle your loan. Worry not, there are proven ways in which you can go about this.

To find a local FHA lender that can process and fund your loan application, consider the following steps:

As with any mortgage financing decision, the primary emphasis and major consideration should not be about just the interest rate or the closing costs. The critical factor always should be whether the FHA mortgage lender you are working with can deliver on their promises within the required timeline. If they fail to do so, the closing will get delayed and you may end up losing the property you desired to purchase. To avoid such a disappointing outcome and close the loan in time, you need to check up on the lender's past origination and performance history related to FHA loans.

What is your FHA Lender's Compare Ratio

To become eligible for mortgage insurance, the loans originated by FHA approved lenders must adhere to the agency's strict FHA loan underwriting guidelines. Additionally, the past track record as reflected in the FHA lender's compare ratio also plays an important role. Basically, the FHA compare ratio measures the rate of default for a lender in relation to the default ration of other FHA lenders who originated loans in the same geographic area.

Suppose that a lender you wish to work with has a default rate of 8% and the average for the area is just 4%. This indicates that almost double the percentage (200%) of FHA loans underwritten by this lender have gone into default when compared with other FHA loans originated by other lenders.

As may be inferred, lenders with a lower compare ratio (<100%) are viewed more favorably by FHA, while anything beyond 150% is reflected poorly on the lender. FHA lenders whose compare ratio falls beyond 175% are placed on the HUD's watch list and may completely lose their right to originate FHA loans if the ratio deteriorates further.

For any prospective borrower considering FHA financing, it's important to be aware of the compare ratios of the FHA lenders they may be looking to work with. If the lender has very low compare ratio (<50%), they may be quite conservative in their interpretation of FHA loan guidelines. Such lenders may have strict underwriting criteria that may be difficult to meet except by those with an ideal profile. On the other hand if you decide to work with a FHA lender with a high default ratio, the process and outcome may be similar as they may also enforce strict criteria to avoid losing their loan origination capability due to another loan default.

There are more than 14,000 approved FHA lenders nationwide. A good number of them might not have handled a significant number of loans to feel at home with FHA loan origination. In addition to the above mentioned compare ratios, also find out the total number of loans a lender has originated to determine their expertise at FHA underwriting.

The information regarding the default rate, compare ratio and number of loans can be accessed through the FHA's website. Select your local area and access the list of lenders along with all their data. This is a crucial step before committing to work with a FHA lender as it helps you make the best choice without having to face difficulties down the line.

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