FHA is a government-insured loan program administered by the Federal Housing Administration. UtahRefi explains how it works — we are not a lender.
One of the most important concepts to understand when exploring FHA loans is mortgage insurance premium, commonly called MIP. Because FHA insures the loan on behalf of the lender, it charges borrowers a premium for that insurance coverage. There are two components: an upfront MIP and an annual MIP paid monthly.
The upfront MIP is 1.75% of the base loan amount and is typically rolled into the loan balance at closing rather than paid as cash out of pocket. On a $400,000 loan, for example, the upfront MIP would be $7,000, bringing the financed amount to $407,000. This amount is owed regardless of down payment size.
The annual MIP is paid monthly as part of your mortgage payment and is expressed as a percentage of the outstanding loan balance. The exact rate varies based on your loan term, loan-to-value ratio, and loan amount. For most 30-year FHA loans with a down payment below 10%, the annual MIP is currently 0.55% of the loan balance per year.
Duration matters significantly. For loans with a term greater than 15 years and a down payment below 10%, MIP continues for the life of the loan — it does not automatically cancel when you reach 20% equity, as private mortgage insurance (PMI) on conventional loans does. For borrowers who put 10% or more down, MIP ends after 11 years. This structural difference is one reason some FHA borrowers choose to refinance into a conventional loan once their home equity crosses the 20% threshold.
For loan terms of 15 years or fewer, MIP duration and rate rules differ. A licensed lender can provide current MIP rates and projected costs based on your specific loan scenario.
FHA loan limits establish the maximum amount that can be borrowed under an FHA-insured mortgage. The U.S. Department of Housing and Urban Development (HUD) sets these limits annually, and they vary by county based on local median home prices. Understanding your county's limit is an important first step when evaluating whether FHA financing fits your target purchase price.
For 2025, the national FHA floor — the minimum base limit applied to most lower-cost counties — is $524,225 for a single-family home. Rural Utah counties with more modest home values generally use this floor limit.
Higher-cost counties receive higher limits. Salt Lake County and Utah County, which together encompass the Wasatch Front's primary population centers and some of Utah's most active real estate markets, have a 2025 FHA limit of $724,500 for a single-family home. This elevated ceiling reflects the significantly higher median sale prices in those markets relative to much of the country.
Washington County (the St. George metro area) has its own separate limit that falls between the floor and the Salt Lake/Utah County ceiling, reflecting the region's distinct pricing dynamics. Davis and Weber counties, both part of the greater Wasatch Front corridor, also carry their own limits worth verifying.
Limits for 2-unit, 3-unit, and 4-unit properties are higher than the single-family figures. If you are considering an owner-occupied multi-unit property using FHA financing, ask a lender about the applicable multi-unit limit for your county.
Because limits are updated each year, always verify the current figures directly through HUD's website (hud.gov) or with a licensed FHA-approved lender before making purchasing decisions.
FHA loans are originated by private lenders — banks, credit unions, and independent mortgage companies — that have been approved by HUD to offer FHA-insured financing. The FHA insures the loan, which reduces lender risk and allows more flexible underwriting standards. Here is a general overview of the path from preparation to closing.
FHA requires a minimum 580 credit score for the 3.5% down payment tier. Before approaching lenders, review your credit reports from all three major bureaus — Equifax, Experian, and TransUnion — and dispute any errors you find. Even small scoring improvements can expand your options and affect the terms lenders offer. At the same time, begin documenting your down payment funds. Lenders will require bank statements showing the funds have been in your account for a certain period (typically 60 days), or a gift letter if the funds come from family.
FHA loans are made by private lenders approved by HUD, not by the government directly. Because FHA insures the loan against default, approved lenders can offer terms that might not otherwise be available on a conventional loan at the same credit profile. Comparing offers from multiple FHA-approved lenders is worthwhile — interest rates, origination fees, and lender-level credit overlays can vary meaningfully across institutions. UtahRefi is an educational publisher and does not originate loans; use our lender-matching resource to connect with licensed FHA lenders in Utah.
Before the loan can close, the property must be appraised by a HUD-approved appraiser. This appraisal serves two purposes: establishing the fair market value of the home (which determines the maximum loan amount), and confirming that the property meets FHA Minimum Property Standards (MPS). FHA Minimum Property Standards address the safety, structural soundness, and basic habitability of the home. Properties with significant issues — active roof leaks, exposed electrical wiring, inadequate heating systems, or evidence of structural failure — may need repairs completed before the loan can proceed. Sellers sometimes negotiate repairs into the purchase contract when FHA financing is involved.
At closing, the upfront MIP of 1.75% is typically added to your loan balance rather than paid in cash. Your loan documents will reflect this financed amount. From that point forward, the annual MIP is included in your monthly mortgage payment alongside principal, interest, and property taxes and insurance. Your lender will provide a Loan Estimate and Closing Disclosure detailing all costs before you sign. Understanding MIP duration — and when, if ever, it cancels — is an important factor in evaluating the total cost of your FHA loan over time.
One of FHA's most practical advantages for buyers with limited savings is its flexibility around the source of the down payment. FHA allows the minimum 3.5% down payment to come entirely from gift funds — money provided by family members, close friends, or eligible nonprofit organizations, with no repayment required. The gifter must provide a signed gift letter stating the funds are a gift and not a loan, and lenders will document the transfer of funds.
For buyers who need help accumulating even the 3.5% minimum, Utah offers additional resources worth knowing about. The Utah Housing Corporation (UHC) administers several down payment assistance (DPA) programs that can be layered with FHA financing for qualifying first-time and repeat buyers. These programs provide secondary financing or grants to cover some or all of the down payment and, in some cases, closing costs.
Some Utah cities and counties also operate local DPA programs targeted at buyers purchasing within city limits or within specific income bands. Availability and terms vary by program and funding cycle.
UtahRefi does not administer, underwrite, or endorse any specific down payment assistance program. Eligibility requirements, income limits, and available funding change frequently. A licensed FHA-approved lender familiar with Utah Housing Corporation programs is the best source of current, accurate information about what may be available in your area and whether you qualify.
FHA, VA, and USDA are three distinct government-backed loan programs, each designed for a different type of borrower and purchase situation. Understanding how they compare helps you explore which program may fit your circumstances before speaking with a licensed lender.
| Feature | FHA Loan | VA Loan | USDA Loan |
|---|---|---|---|
| Min. Down Payment | 3.5% (580+ credit) | 0% | 0% |
| Mortgage Insurance | Upfront MIP (1.75%) + annual MIP | Funding fee only (no PMI) | Guarantee fee (upfront + annual) |
| Who Qualifies | Most buyers (primary residence) | Veterans, active-duty, surviving spouses | Income- and area-eligible buyers |
| Property Location | Anywhere in Utah | Anywhere in Utah | USDA-eligible rural areas only |
| Primary Residence Required | Yes | Yes | Yes |
| Loan Limits | County limits apply (up to $724,500 in SLC/Utah Co.) | None (full entitlement) | No set dollar limit |
| Credit Score Minimum | 580 for 3.5% down (lender overlays may be higher) | No set minimum (lender overlay typical) | 640 typically |
Table reflects general program guidelines. Individual lenders may impose additional requirements. Verify all details with a licensed lender.
UtahRefi is an educational publisher, not a lender. Use this resource to learn about the FHA program, then connect with licensed FHA-approved lenders to compare offers and understand what programs may be available based on your individual financial profile. Loan terms, APR, fees, and eligibility are determined solely by licensed lenders.
By connecting, you agree to be contacted by participating licensed lenders. UtahRefi does not originate loans or set rates.
Already have an FHA loan? Learn about the FHA Streamline Refinance and FHA cash-out refinance options available to Utah homeowners.
Explore FHA Refinance → Geographic GuideUnderstand how FHA financing works in Washington County and the St. George market, including local loan limits and housing context.
Read the Guide → Compare ProgramsCompare FHA with the VA loan program. VA offers zero down payment and no mortgage insurance for eligible veterans and service members.
Explore VA Loans →