How FHA is structured
FHA insures the lender against loss. You still borrow from a lender, not from HUD. Minimum down payment is typically 3.5% of the lesser of sale price or appraised value for borrowers at or above the FHA credit floor. Upfront mortgage insurance premium (UFMIP) is financed into the loan; monthly MIP lasts for the life of the loan on most low-down-payment files, which is the part first-time buyers are rarely told on a 30-second call.
When FHA wins—and when it does not
FHA often wins on credit events, limited reserves, or gift-heavy files. Conventional often wins once the credit score and 5% down support cheaper mortgage insurance that can be cancelled. We run both. Gift funds, seller credits, and repair escrow (203(k) conversations) are common in Portland’s older housing stock; FHA appraisals look harder at health-and-safety items than a conventional appraisal.
FHA in a multiple-offer market
Some listing agents still treat FHA as slower. A complete file, a broker who answers the phone, and an honest repair conversation is how FHA offers get accepted in Happy Valley, inner Portland, Seattle, and Vancouver, Washington. We will tell you if the property looks like an FHA reject so you do not burn earnest money.