The Step-by-Step Process
- Check your credit score. AnnualCreditReport.com is free. FHA accepts 580+ for 3.5% down. Below 580, plan 4–6 months to bring it up before applying.
- Get pre-approved with FHA-experienced lenders. Not every lender does heavy FHA volume. Get quotes from at least 2 FHA-specialists. Compare rate + MIP + lender fees.
- Stack SONYMA if eligible. First-time buyer + income/price limits. SONYMA's $15K DPAL forgives over time. Reduces effective down payment.
- Pre-qualify the building (condo/co-op). Check FHA Approved Condominium List. Co-ops require board approval AND FHA approval (rare in older NYC buildings).
- Tour FHA-eligible properties. Single-family is always FHA-eligible. 2-fam, 3-fam, 4-fam owner-occupant works (with self-sufficiency rules). Co-ops: very restricted.
- Get appraisal scheduled. FHA appraisals are stricter than conventional — they assess habitability + safety. Some pre-1978 properties need lead-paint disclosures.
- Close + start paying MIP. FHA charges 1.75% upfront mortgage insurance + monthly MIP. MIP stays for life of loan if down payment <10%, drops at 11 years if down payment ≥10%.
Key Things to Know
3.5% down is the headline
$725K Queens median × 3.5% = $25,375 down. Plus closing costs (~$30K). SONYMA cuts effective down to ~$10K.
MIP for life of loan
FHA's mortgage insurance does NOT drop off automatically — must refinance to remove. Plan for refi at 5+ years if rates allow.
Loan limits by county
FHA loan limit Queens/Nassau 2026: ~$1,089,300 single-family. Multi-family ratchets up by unit count.
Property condition matters
FHA requires property to meet HUD habitability standards. Major systems (roof, HVAC, plumbing) must be functional. Sellers often resist FHA over conventional for this reason.
Multi-family owner-occupant works
1-4 unit FHA allowed for owner-occupants. Self-sufficiency rule: 75% of OTHER units' rent must cover full mortgage. Strong for Queens 2-fams.
FHA condo approval is building-specific
Building must be on HUD's FHA Approved Condominium List. Many newer NYC buildings ARE approved; many older co-ops are NOT.
Frequently Asked Questions
Yes — if the building is on HUD's FHA Approved Condominium List. Most newer (post-2010) NYC condos are approved. Most older co-ops are NOT. Pre-qualify the building before falling in love.
Sometimes. Some Queens sellers and listing agents have a stigma against FHA, fearing the appraisal will fail. We coach buyers on how to make their FHA offer competitive (escalation clauses, larger earnest money, faster timelines).
30–45 days typical, slightly longer than conventional. Plan 60-day contract-to-close on FHA financing contingency.
Yes — once you have 20% equity (via appreciation + paydown), refinance to conventional and drop the MIP entirely. Common play 3–7 years post-purchase in appreciating NYC markets.
Single-family: $1,089,300. 2-fam: $1,394,775. 3-fam: $1,685,850. 4-fam: $2,095,200. Updated annually by HUD.
Related Resources
Need personal guidance on FHA loans?
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