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Can I make a 50% down payment with an FHA mortgage?

I have several questions about the FHA Mortgage Program. Am I allowed to make a 50% down payment when using the program? My husband is a temporary employee. How will his income be treated under the program? Finally, can I use money from my retirement account to pay for the down payment?

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

To answer your first question, there is no down payment maximum limit for an FHA loan so you can put down 50% of the property purchase price. The FHA Mortgage Program requires borrowers to pay an up-front and ongoing mortgage insurance premium (MIP), which is an extra cost on top of your closing costs and monthly mortgage payment, so most home buyers that are able to make a down payment of 20% or more choose to use conventional mortgage programs instead of the FHA Program. We offer an extensive review of the FHA Mortgage Program including the FHA MIP on our site. Additionally, you can use our DOWN PAYMENT CALCULATOR to evaluate the costs and mortgage required to buy a home with a down payment of 50% or more.

To answer your second question, if the lender verifies your husband's employment and his employer states that he is a temporary employee the lender may not consider his income in determining your ability to qualify for the mortgage. In that scenario, the lender would only consider your income in determining what size mortgage you can afford. There are some lenders that will provide a mortgage based upon a borrower's "stated income" but these programs typically require the borrower to pay higher interest rate or fees. We offer an overview of "stated income" mortgages on FREEandCLEAR. Additionally, you may need to consider non-traditional hard money lenders if traditional lenders such as banks, mortgage brokers or credit unions are unwilling to give your husband credit for his income.

To answer your final question, the FHA does allow you to use money from your retirement account to pay for down payment.

Our best advice is that you contact three-to-four lenders in your area to discuss your situation and what mortgage programs are available to you. Ideally, you would be able to save money by obtaining a conventional mortgage as opposed to an FHA Mortgage or "Stated Income" Mortgage but you need to speak with multiple lenders to understand what is possible. Use the INTEREST RATES function on FREEandCLEAR to compare and contact lenders in your area.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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