An FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD, and made by an FHA-approved lender, here in San Luis Obispo County as anywhere else. FHA publishes its own credit score tiers, can accept other credit records where there is no score, and sets shorter waiting periods after a bankruptcy or a foreclosure than Fannie Mae's.
2026 limit for a single-unit home. Source: HUD FHA Mortgage Limits lookup, San Luis Obispo County, CA, CY2026. See the published list. Limits are republished every year. All of the county's loan limits.
What a lender weighs before this program is on the table. A lender can add rules of its own, and those rules can differ from one lender to the next.
FHA's rule is published. A decision credit score of 580 or above is eligible for FHA's standard terms. A score from 500 to 579 can still be insured, on more limited terms. Below 500, FHA does not insure the loan at all. The decision score is the middle of your three bureau scores, the lower of two, or the only one there is, and with more than one borrower FHA uses the smallest of their decision scores. It is not necessarily the score a free app shows you.
FHA sets the floor and lenders can add rules above it, so one lender's decline is not FHA's.
FHA looks at whether the payment fits your income alongside the debts you already carry, and at whether that income is likely to continue. Pay stubs, tax returns, bank statements, and an explanation for anything that looks odd. Self-employed income can qualify; it takes more paper, not a different program.
An FHA appraiser looks at the condition of the property as well as its value, and a house that needs work can fail that review. That is what the 203(k) option exists for.
An FHA loan is for a home you live in. It is not a program for a vacation home, an investment property is eligible only in cases HUD lists, and the file says so in writing.
The steps in order, so you can see what is coming. Nothing here is underwritten until a lender underwrites it.
You do not need a report in hand. Tell us what you know, and we can talk through what FHA's published tiers mean for your file. No credit pull to have that conversation.
With your permission we pull credit, look at the decision score FHA will use, and choose which FHA-approved lenders to send the file to.
Your loan officer reviews the file and, if it supports one, can write a pre-qualification letter.
Once a seller accepts, the FHA appraisal and the lender's underwriting run alongside each other.
If yours is not here, call us. The useful answer depends on your file.
A decision credit score of 580 or above is eligible for FHA's standard terms, and a score between 500 and 579 is still eligible, on more limited terms. Below a score of 500, FHA does not insure the loan at all. Individual lenders are free to require more than FHA does, which is why the same application can get different answers from different lenders.
Yes. FHA's 203(k) option finances the purchase and the repairs together in one FHA loan, which is one route when a property would not pass FHA's minimum property requirements as it stands. Raise it before you pay for an appraisal on a house that clearly needs work.
An FHA loan carries an up-front mortgage insurance premium and an annual premium, and how long the annual premium stays on the loan depends on how much equity the loan starts with. Some FHA loans carry it for the life of the loan and some do not, so the honest answer is that it depends on the file. Ask a loan officer to show you which case yours is before you commit to it.
Possibly. An FHA streamline refinance exists for a loan that is already an FHA loan, subject to FHA's conditions, such as a recent record of on-time payments. Whether it is worth doing depends on what it costs against what it changes.
State first-time buyer help
California's own first-time buyer programs: a CalHFA first mortgage, MyHome assistance, and ZIP for closing costs, written through approved lenders.
Not government-insured
A loan for solid credit and income, with private mortgage insurance that does not have to be permanent.
An earned benefit
For veterans, service members and some surviving spouses. It begins with a Certificate of Eligibility.
Where this program fits:Buying a homeRefinancingThe county's loan limitsThe Central CoastServices
Side by side:FHA vs conventionalFHA vs VAFHA vs USDA
Where it comes up in the county:Santa MariaOrcuttLompoc
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This page is general information about a loan program, not an offer of credit or a commitment to lend. What a lender will do with your file depends on the file.
Answer a few questions and your loan officer can talk you through which programs could fit your file, including when this one does not.
No credit pull to get started. This is not a commitment to lend. Equal Housing Opportunity.
