FHA Loans
FHA loans open the door to homeownership for buyers who need a lower down payment or more flexible credit — one of the most accessible paths to a first home on Oʻahu. Here’s how they work, what they cost, and how our team can help you decide if one is right for you.
🏛 What Is an FHA Loan?
An FHA loan is a mortgage insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development (HUD). The FHA doesn’t lend the money directly — a regular lender funds your loan, and the FHA insures it against loss if a borrower defaults.
That insurance is what lets lenders say yes to buyers who might not qualify for a conventional loan: it makes lower down payments and more forgiving credit requirements possible. In exchange, FHA borrowers pay mortgage insurance premiums (more on that below).
✅ Who Qualifies?
FHA loans are known for being more accessible than conventional financing. General requirements include:
- Credit & down payment: a credit score of 580 or higher qualifies for the minimum 3.5% down payment. Scores of 500–579 may still qualify with 10% down.
- Debt-to-income (DTI): FHA allows higher DTI ratios than many conventional loans — many lenders look for 43% or lower, with flexibility in some cases.
- Steady income: typically a two-year employment history, documented with pay stubs and W-2s.
- Primary residence: the home must be owner-occupied as your primary residence.
- Gift funds allowed: your down payment can come from a gift from a family member.
FHA isn’t only for first-time buyers — repeat buyers and relocating families can use it too, as long as the home is their primary residence.
💰 Key Benefits of an FHA Loan
- Low down payment — as little as 3.5%
- Flexible credit guidelines — room for past financial setbacks like medical debt or a prior bankruptcy
- Higher allowable debt-to-income ratios than many conventional loans
- Gift funds can cover the down payment
- Works for 1–4 unit properties — live in one unit and rent the others ("house hacking")
📍 FHA Loan Limits in Hawaiʻi
FHA sets a maximum loan amount that varies by county, based on local median home prices. Because they’re tied to median prices — not the higher conforming limit — FHA limits in Hawaiʻi are often lower than VA or conventional limits, which is one of the most important things to know before you start shopping. Here are the 2026 single-family limits:
| County | 2026 FHA Limit (Single-Family) |
|---|---|
| Honolulu (Oʻahu) | $828,000 |
| Maui | $1,299,500 |
| Kalawao | $1,299,500 |
| Kauaʻi | $1,110,900 |
| Hawaiʻi (Big Island) | $586,500 |
Limits are higher for 2–4 unit properties. Because the Oʻahu limit of $828,000 sits below the island’s median single-family price, FHA often works best here for condos, townhomes, and homes in more accessible price ranges — or paired with a larger down payment. Limits change yearly; confirm your exact figure with an FHA-approved lender or HUD’s loan limit lookup tool.
🧾 FHA Mortgage Insurance (MIP)
Because of the low down payment, FHA loans require mortgage insurance premiums (MIP) — this is the main trade-off for the easier qualification. There are two parts:
- Upfront MIP: 1.75% of the loan amount, paid at closing (usually rolled into the loan rather than paid in cash)
- Annual MIP: roughly 0.55% of the loan balance per year for most buyers, split into your monthly payment (the exact rate varies with your loan term, size, and down payment)
How long you pay annual MIP depends on your down payment:
| Down Payment | How Long MIP Lasts |
|---|---|
| Less than 10% | The life of the loan |
| 10% or more | 11 years |
Because MIP often stays for the life of the loan, many FHA buyers later refinance into a conventional loan once they’ve built enough equity, to drop the insurance. It’s a common and smart long-term strategy — we’re happy to talk it through with you.
🏠 What Kind of Property Can You Buy?
FHA loans can be used to buy a primary residence, including:
- Single-family homes
- Townhomes
- Condominiums — the project must be FHA-approved
- 2–4 unit properties, as long as you live in one unit
Every home must also pass an FHA appraisal that checks both its value and that it meets basic safety and condition standards — so the property has to qualify, not just the buyer.
You can check whether a condo project is approved using HUD’s lookup tool:
👉 Search the FHA-Approved Condo List
🤝 How Our Team Can Help
FHA can be a great fit — or not, depending on the home and your goals. The county loan limits, the FHA appraisal standards, and the long-term cost of MIP all factor in. That’s where we come in.
As a top-performing team at REMAX Hawaii West Oʻahu, we help Oʻahu buyers:
- Decide whether FHA, conventional, or another program actually fits your situation
- Connect with experienced FHA-approved lenders from our preferred list
- Find homes — and FHA-approved condos — that fit within the county limits
- Navigate the FHA appraisal and keep the transaction on track to closing
- Plan ahead for a future refinance to drop mortgage insurance when it makes sense
❗ Important Things to Know Before You Apply
Mortgage Insurance Often Sticks Around
Unlike conventional PMI, FHA mortgage insurance usually lasts the life of the loan when you put down less than 10%. Many buyers plan to refinance later once they have equity — worth keeping in mind when you compare FHA to a conventional loan.
The Loan Limit May Be Lower Than You Expect
On Oʻahu, the 2026 FHA limit is $828,000, which is below the island’s median single-family home price. FHA may be a better fit for condos, townhomes, and homes in more accessible price ranges — we can help you target homes that work.
Always Confirm With Your Lender
FHA guidelines, loan limits, and MIP rates change, and every buyer’s situation is different. It’s always best to confirm the details with an FHA-approved mortgage loan originator. Contact us and we’ll get you a list of our preferred FHA-approved lenders.
🏠 Ready to Take the Next Step?
Whether FHA turns out to be your path or just one option we compare, we’d love to help you figure out the smartest way into your first home on Oʻahu.
Wondering If an FHA Loan Fits You?
Find out what you may qualify for, get matched with a trusted FHA-approved lender, and start touring homes within the program’s limits — or just ask us anything.
Or call or text (808) 351-8394 · TeamCastaneda@REMAXHawaii.com
Joe Castaneda (R) RB-23007 · REMAX Hawaii
For official FHA loan information, visit the U.S. Department of Housing and Urban Development. Eligibility rules, loan limits, and mortgage insurance premiums are subject to change. Figures shown reflect 2026 HUD/FHA limits and current MIP rates. This page is for general information only and is not a commitment to lend; consult an FHA-approved lender for guidance specific to your situation.