Trump FHA loan changes span two terms and pull in opposite directions: the first term (2017–2021) mostly loosened rules for lenders and expanded condo access, while the second term (2025–present) has tightened who can borrow. The core FHA program is intact. The 30-basis-point mortgage insurance premium cut from March 2023 has not been reversed. The most consequential change for individual borrowers is the removal of FHA eligibility for non-permanent residents.
Who Can Get an FHA Loan Now
In 2025, FHA issued a mortgagee letter removing the handbook sections that previously allowed non-permanent residents to qualify for FHA-insured mortgages. FHA loans are now reserved for U.S. citizens and lawful permanent residents. The administration stated that non-permanent residents face immigration uncertainties that could jeopardize their ability to meet long-term mortgage obligations.
Before this change, certain non-permanent residents with valid work authorization and a Social Security number could qualify. If you’re affected, conventional loans through private lenders remain an option, but they typically require higher credit scores and larger down payments than FHA.
Baseline credit and down payment rules are unchanged. A score of 580 or above qualifies for the standard 3.5% down payment. Scores between 500 and 579 require 10% down.
FHA Mortgage Insurance Premiums in 2026
The annual premium cut that HUD announced in March 2023 is still in effect. For most borrowers on a 30-year FHA loan with more than 5% down, the annual premium runs between 0.50% and 0.55% of the outstanding balance, depending on loan-to-value ratio.1U.S. Department of Housing and Urban Development. HUD Reduces FHA Mortgage Insurance Premiums The upfront premium remains 1.75% of the base loan amount and is typically financed into the loan.2U.S. Department of Housing and Urban Development. Appendix 1.0 – Mortgage Insurance Premiums
The Mutual Mortgage Insurance Fund that backs these premiums finished fiscal year 2024 with a capital ratio of 11.47%, well above the 2% statutory minimum.3U.S. Department of Housing and Urban Development. Financial Status of the FHA Mutual Mortgage Insurance Fund FY 2024
FHA Loan Limits for 2026
Loan limits are set annually and tied to the conforming loan limit from the Federal Housing Finance Agency. The FHA floor is 65% of the conforming limit; the ceiling is 150%.
For a single-unit property in 2026:
- Floor (most counties): $541,287
- Ceiling (high-cost markets): $1,249,125
- Alaska, Hawaii, Guam, and the U.S. Virgin Islands one-unit ceiling: $1,873,625
Multi-unit limits in low-cost areas: $693,050 for two units, $837,700 for three, and $1,041,125 for four. In high-cost areas, those rise to $1,599,375, $1,933,200, and $2,402,625.4U.S. Department of Housing and Urban Development. Mortgagee Letter 2025-23 – 2026 Nationwide Forward Mortgage Loan Limits
How Underwriting Treats Higher-Risk Files
A 2019 update to the TOTAL Mortgage Scorecard, FHA’s automated evaluation system, flags more applications for manual review. If your credit score is below 620, your debt-to-income ratio is above 43%, or both, the scorecard returns a “Refer” and a human underwriter has to review the file.5U.S. Department of Housing and Urban Development. FHA TOTAL
Manual underwriting is not the same as denial. The underwriter looks for compensating factors: verified cash reserves, minimal payment shock relative to your current rent, or residual income above program thresholds. There are hard ceilings, though. Borrowers with credit scores below 580 cannot exceed a 31% housing expense ratio or a 43% total debt ratio, regardless of what compensating factors they can show.6U.S. Department of Housing and Urban Development. Mortgagee Letter 2014-02 – Manual Underwriting
Student Loans and Your DTI
How your student debt is counted can make or break an FHA approval.
If you’re actively making payments, including under an income-driven repayment plan, lenders use your actual documented monthly payment. That is a real benefit if your income-driven payment is much lower than a standard amortization payment would be.
If your credit report shows a zero-dollar payment, FHA requires lenders to use 0.5% of the outstanding balance as a stand-in. On a $40,000 balance, that adds $200 per month to your DTI even if you’re in deferment or forbearance.
If your loans have been forgiven, canceled, or discharged, the debt can be excluded entirely, but you need written documentation from the servicer.7U.S. Department of Housing and Urban Development. Mortgagee Letter 2021-13
Condo Buyers: Single-Unit Approval
The 2019 condo rule remains in effect and is one of the more borrower-friendly changes still on the books. Individual condo units in buildings that lack full FHA project certification can qualify for FHA financing through “single-unit approval,” provided the building has at least five dwelling units and meets FHA’s insurance concentration, owner-occupancy, and financial condition standards.8U.S. Department of Housing and Urban Development. FHA Condominiums
The rule also set the owner-occupancy requirement at 50% for most projects and extended the recertification period for approved projects from two years to three, which reduces paperwork burdens on homeowners associations.9Federal Register. Project Approval for Single-Family Condominiums
What Could Change Next
Two moving pieces are worth watching if you’re planning an FHA loan in the next year.
HUD staffing. Reports from early 2025 described workforce reductions of up to 40–50% at HUD through probationary terminations, early retirement offers, and reductions in force. HUD Secretary Scott Turner disputed parts of that reporting and said mission-critical functions would not slow down. FHA loan endorsements, condo project approvals, and loss mitigation programs all rely on specialized staff, so if cuts reach those teams, processing times and lender responsiveness could suffer.
GSE privatization. The administration has continued discussing an exit from federal conservatorship for Fannie Mae and Freddie Mac. If that happens, privatized GSEs could tighten conventional standards and push more borrowers toward FHA, or a restructured secondary market could reduce FHA’s role. Nothing is finalized.
Executive orders signed in January and March 2026 also direct HUD and the Federal Housing Finance Agency to look at regulatory barriers to construction, manufactured housing lending, and low-balance mortgage incentives.10The White House. Removing Regulatory Barriers to Affordable Home Construction Those orders set direction; specific rules that would change what you can borrow have not yet followed.