FHA
Home Loans

FHA Home Loans in Spokane

FHA loans make it possible for individuals and families in Spokane, Washington to achieve homeownership with flexible terms and affordable rates. Backed by the Federal Housing Administration (FHA), these federally insured loans allow approved lenders—like Canopy Credit Union—to offer lower interest rates and reduced down payment options, even for borrowers who may not qualify for a conventional mortgage.

At Canopy Credit Union, our FHA home loans are designed to support members at every stage of their financial journey. Whether you’re buying your first home or looking for a more accessible path to affordable housing, we’re here to help you grow.

What are FHA home loans and how do they work?

An FHA loan is a type of home mortgage insured by the FHA, a division of the U.S. Department of Housing and Urban Development (HUD). When you apply for an FHA home loan, the FHA provides insurance to your lender, offering them protection in the event that you default on your loan.

Because FHA loans require lower down payments and have more flexible credit score requirements than conventional mortgages, they are especially popular among first-time homebuyers and those with limited financial history. Even if you’ve experienced bankruptcy or other financial setbacks, you may still qualify under current FHA loan guidelines.

Step 1: Qualify for an FHA Loan

To qualify, your primary residence must meet FHA minimum property standards, and you’ll need to meet certain FHA loan requirements, such as limits on debt-to-income ratio (DTI), credit score, and employment history.

Step 2: Pay the Down Payment and Other Costs

Once approved, you can make a down payment as low as 3.5% of the home’s purchase price, meaning FHA financing can cover up to 95.5% of your home’s value. You’ll also need to account for closing costs, including appraisal fees, origination fees, and other lender-related expenses.

Step 3: Pay Your Monthly Mortgage Rates and Premiums

Your monthly mortgage payment will include your loan principal, interest, and mortgage insurance premiums (MIP). FHA loans require two MIPs—an upfront premium at closing and a monthly premium built into your mortgage payment. These premiums protect the lender and help keep FHA loan rates more accessible.

FHA home loan requirements

If you’re considering an FHA home loan, understanding the eligibility criteria is an important first step. These loans are designed to be accessible, but there are still key FHA loan requirements you’ll need to meet. Here’s what to expect:

To qualify for an FHA loan, you’ll typically need a credit score of 580 or higher with a minimum 3.5% down payment. If your score falls between 500 and 579, you may still qualify, but a 10% down payment will be required. Canopy CU is here to help you understand your credit history and prepare your application confidently.

Depending on your credit score, you’ll need to make a down payment of 3.5% to 10% of your home’s value. Need assistance with the upfront cost? Ask us about down payment assistance programs that may be available to you in Spokane and the surrounding areas.

To qualify for FHA financing, no more than 31% of your income should go toward your monthly mortgage payment, and your total monthly debt payments shouldn’t exceed 43% of your income. We can help you evaluate your DTI ratio and find a loan that fits your budget.

FHA loans require two types of mortgage insurance premiums:

These premiums are designed to protect the lender and allow more people to qualify for federally backed loans.

The properties that can be bought with an FHA loan are Single-Family Homes, Multi-Family Homes (up to four units), Condominiums, and Manufactured Homes that the FHA approves and must serve as the borrower’s primary residence.

A HUD-approved appraiser will assess the property to ensure it meets minimum safety and quality standards. This includes evaluating the home’s condition, market value, and habitability.

In Spokane County, the 2025 FHA loan limit is set at $524,225. This represents the maximum loan amount you can borrow under the FHA loan program in this area.

FHA Mortgage / Loan / Lending Rates

FHA interest rates are competitive compared to conventional mortgage rates as they are federally insured, allowing lenders to offer low rates. As of 2025, the national average rate for a 30-year FHA loan is currently 6.62%.

The FHA interest rate will depend on a range of factors, including but not limited to:

At Canopy Credit Union, we’ll help you understand where you stand and find an FHA loan rate that fits your financial goals.

calculate your FHA mortgage payment

Below, our FHA mortgage calculator helps you estimate your potential FHA loan payments, including additional costs.

other types of FHA loans

In addition to the traditional FHA mortgage, the Federal Housing Administration offers several specialized FHA loan programs designed to support unique homeowner needs, from retirees to those renovating a new purchase. Here’s a quick overview:

The Home Equity Conversion Mortgage (HECM) is the FHA’s reverse mortgage option for homeowners aged 62 and older. It allows qualified individuals to convert the equity in their home into cash—either as monthly income, a line of credit, or a lump sum—while continuing to live in their home. HECM reverse mortgages are federally insured and are a great option for retirement planning and supplementing fixed income.

The FHA 203(k) loan is designed for buyers who want to purchase and renovate a home using one convenient loan. It allows borrowers to finance repairs, remodels, or structural improvements as part of their FHA mortgage, making it ideal for those purchasing a fixer-upper or investing in sweat equity.

The FHA Energy Efficient Mortgage helps homeowners finance energy-saving upgrades as part of their home loan. This program allows borrowers to improve mechanical, electrical, and plumbing (MEP) systems with energy-efficient upgrades, leading to long-term savings on utility bills while reducing environmental impact.

There are two types of Section 245(a) loans for homeowners who expect their income to increase. The Graduated Payment Mortgage (GPM) starts with lower monthly mortgage payments that increase over time. However, for payments that go directly toward the principal, homeowners can apply for the Graduated Equity Mortgage to build equity faster.

FHA loan application online

FHA loans make it possible for individuals and families to afford a home—even if they have low credit scores, limited funds for a down payment, or past financial challenges like bankruptcy. These federally backed loans offer flexible eligibility, but borrowers still need to meet the FHA loan requirements and be prepared for monthly mortgage payments, mortgage insurance, and current FHA loan rates.

At Canopy Credit Union, we proudly serve the Spokane community, helping members access affordable housing through trusted FHA home loan solutions. Whether you’re applying for your first mortgage or looking to rebuild your path to homeownership, our team is here to support you.

Ready to get started?

hear from these happy borrowers

At Canopy Credit Union, we’ve helped countless Spokane neighbors achieve homeownership through FHA home loans—even when they thought it wasn’t possible. From first-time buyers with limited savings to individuals rebuilding after financial setbacks, our members say it best: the right support makes all the difference.

If you need anything Mortgage related, talk to Renee. Extremely knowledgeable and helpful in all aspects of purchasing a home. Highly recommend using Canopy and their team.

– Seth S. | ☆☆☆☆☆

Leah absolutely killed it! She under-promised and overdelivered every step of the way. I can’t believe how smooth this process went for opening up a HELOC. I strongly encourage anyone to work with this credit union, and specifically Leah! Thank you so much! You are a legend.

– Stephen M. | ☆☆☆☆☆

Canopy CU is a financial institution that feels like family. Rich Jones was awesome to work with. He offered some solid advice and is genuinely interested in our financial journey and helping us reach our goals. They also have great products and local decision-making. That’s huge.

– Kris F. | ☆☆☆☆☆

FHA loan FAQs

What is the Downside of an FHA Loan?

While FHA loans are known for low interest rates and lenient credit requirements, they do come with additional costs. Borrowers are required to pay both:

An upfront Mortgage Insurance Premium (MIP)—typically 1.75% of the loan amount, and
An annual MIP, which is paid monthly and varies based on your loan’s size, term, and loan-to-value (LTV) ratio.

These insurance premiums help protect FHA-approved lenders but add to your monthly mortgage payments. Use our FHA mortgage calculator to estimate your monthly costs—or consult with us to compare different loan programs and find the right fit for your budget.

How to Apply for an FHA Loan?

To apply for an FHA home loan, you’ll need to go through an FHA-approved lender, like Canopy Credit Union. The process includes:

Completing a loan application,
Submitting financial documents such as pay stubs, credit reports, and employment history, and
Ensuring the property meets FHA home loan guidelines.

If you're not ready to commit just yet, we offer a pre-approval process to help you understand how much you may qualify to borrow, without any pressure or obligation. It’s a great first step toward buying your home with confidence.

Can My FHA Mortgage be Refinanced?

FHA loans have several refinancing options, including the FHA Streamline Refinance, which lowers your monthly mortgage payments or changes your loan term.

These options require less paperwork and often don’t need a new appraisal, making the process faster and easier. If you're wondering whether refinancing your FHA loan is right for you, our team is here to walk you through your options.