Yes. FHA loans are available to non-permanent resident aliens (including H1B holders) as long as:
What is an FHA loan?
An FHA (Federal Housing Administration) loan is a government-backed mortgage with lower down payment and credit score requirements than conventional loans. The FHA insures the loan, allowing lenders to take more risk.
FHA loan basics (2026)
| Feature | FHA | Conventional |
|---|---|---|
| Min credit score | 580 (3.5% down) | 620 (3-5% down) |
| Minimum down payment | 3.5% | 3% |
| Mortgage Insurance | FHA MIP (mandatory) | PMI (removable at 20%) |
| Loan limits | $498,257 (most areas) / $1.1M (high-cost) | Up to $766,550 (conforming) |
| Income limits | None | None |
| Property types | 1-4 units (must be primary residence) | More flexible |
Are H1B holders eligible for FHA loans?
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Yes. FHA loans are available to non-permanent resident aliens (including H1B holders) as long as:
- The property will be your primary residence
- You have a valid SSN
- You have a valid visa with intent to remain in the US
FHA MIP — the hidden cost
FHA loans require Mortgage Insurance Premium (MIP) in two forms:
- Upfront MIP: 1.75% of loan amount, paid at closing (can be rolled into the loan)
- Annual MIP: 0.55% per year (divided into monthly payments)
For a $400,000 FHA loan:
- Upfront MIP: $7,000 (one-time)
- Annual MIP: $2,200/year = $183/month
FHA MIP cannot be canceled unless you put 10%+ down (then it drops after 11 years). For most FHA borrowers: MIP is forever — you must refinance to a conventional loan to remove it.
FHA vs Conventional for H1B holders
| Situation | Better choice |
|---|---|
| Credit score 580-639 | FHA (only option) |
| Credit score 640-679 | FHA (lower down), or Conventional with 10%+ down |
| Credit score 680+ | Conventional (no MIP after 20%, or removable PMI) |
| Down payment under 5% | FHA (3.5% minimum) |
| Down payment 20%+ | Conventional (no insurance) |
| Buying in high-cost area (SF, NY, LA) | Check FHA loan limits — may need jumbo |
The "credit score under 680 and 5 years in US" case
Most H1B holders who arrived with no US credit history and are in year 2-4 should consider FHA if they want to buy early. The lower score requirement is the main advantage.
However: FHA MIP adds $150-200/month permanently. Over 10 years on a $400K loan, that's $18,000-24,000 in MIP. Weigh that against the cost of waiting 12 more months to hit 680+ for conventional.
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