A recent mortgage industry report showed that FHA loans are the second most popular mortgage financing option among home buyers in the state of Washington and across the U.S.
The authors also reported an increase in FHA loan usage among home buyers purchasing new construction, amid an ongoing shortage of existing homes.
The FHA mortgage insurance program allows home buyers in Washington to purchase a home with as little as 3.5% down, often with more flexible criteria compared to conventional financing.
On April 15, the Mortgage Bankers Association (MBA) published their latest loan application survey, which contained data relating to mortgage financing trends nationwide.
According to that report, FHA loans remain a popular type of home loan among buyers in Washington and nationwide. Some key points from this latest survey in terms of FHA vs conventional loans include the following:
The latest MBA report also pointed to a shift in home buyer preferences. Apparently, a lot of buyers in Washington and elsewhere across the U.S. are turning their attention toward new construction versus existing homes.
According to Joel Kan, MBA’s Vice President and Deputy Chief Economist:
“FHA share of total applications was 18.2% for week ending April 10, 2026. Joel Kan noted FHA purchase applications were up 5% for week ending April 3, 2026, supported by FHA mortgage rate ~30 bps lower than conventional. Recent high seen at 21.8% (week ending October 17, 2025).”
The Federal Housing Administration (FHA) loan program has insured more than 40 million home loans since it was first established in 1934. In fiscal year 2025, FHA recorded 876,502 total single-family forward mortgage endorsements totaling $274.76B in unpaid principal balance.
Other facts about America’s longest-running government mortgage program:
FHA mortgage loans are backed by the government. This insurance gives banks and lenders additional protection against borrower default. As a result, lenders can be more flexible when qualifying FHA loan applicants.
A conventional loan, on the other hand, does not receive any kind of government backing.
In addition to offering a low down payment of 3.5%, FHA loans tend to be more forgiving of past credit issues and high debt levels. Some conventional mortgages require a larger upfront investment, often ranging from 5% to 20%, along with stricter criteria.
FHA loans appeal to different types of home buyers in Washington, including:
Borrowers with limited savings: With its relatively low down-payment requirement of 3.5%, the FHA mortgage program appeals to buyers who have limited funds in the bank.
First-time buyers: While this program is not limited to first-time buyers, it can make homeownership more attainable for this group by clearing obstacles.
Lower credit scores: FHA loans typically have more flexible credit requirements than conventional mortgages. Home buyers with a credit score of 580 or higher could qualify for the low down payment mentioned above.
Past credit issues: FHA loans can provide a path to homeownership for buyers who’ve had past credit issues like a bankruptcy or foreclosure.
FHA loans are one of the most popular Washington mortgage options among Washington home buyers, and for good reason. There are plenty of FHA loan benefits to consider. FHA loan requirements are typically more lax than conventional mortgage criteria, making them easier to qualify for, particularly for home buyers with limited savings and/or previous credit issues.
But it might not be the right mortgage choice for all borrowers.
For one thing, FHA loans require homeowners to pay for mortgage insurance, sometimes for as long as they keep the loan. This insurance allows home buyers to make a smaller down payment, but it also increases the size of the monthly payments.
Home buyers in Washington who can afford to make a larger down payment might be better off with conventional financing, rather than FHA. If you put down 20% or more on a conventional loan, you could avoid paying mortgage insurance entirely.
Similarly, military members and veterans can often qualify for the VA loan program. VA-guaranteed mortgage loans can bring additional benefits into the picture, such as the ability to finance 100% of the purchase price.
The bottom line is that home buyers in Washington have a lot of choices when it comes to home buyer mortgage options. It’s not a one-size-fits-all situation. Think about your short-term priorities as well as your long-term goals, and find a home loan that suits your situation.
If you need financing to buy a home in WA State, we can help. Sammamish Mortgage has been helping borrowers across the Pacific Northwest since 1992, including Washington, Colorado, Idaho, Oregon, and California, and we have plenty of mortgage products to choose from. Call Sammamish Mortgage today to get an instant rate quote and get pre-approved for a mortgage!
An FHA loan is a government-insured mortgage backed by the Federal Housing Administration. In Washington State, it can help home buyers qualify with a lower down payment and more flexible credit standards than many conventional loans.
FHA loans are popular because they allow down payments as low as 3.5% and can be easier to qualify for than conventional financing. They can also help buyers with limited savings, lower credit scores, or past credit issues.
A minimum down payment of 3.5% is typically required for an FHA loan. The exact amount depends on the purchase price or appraised value of the home.
No. FHA loans are not limited to first-time buyers. Buyers who have owned a home before can also qualify if they meet program and lender requirements.
Yes. FHA loans generally have more flexible credit guidelines than conventional mortgages, which can make them a good option for borrowers with lower credit scores or previous credit problems.
Yes. FHA financing can be an option for borrowers who have experienced bankruptcy or foreclosure in the past, as long as they meet current eligibility rules and any required waiting periods.
FHA loans can be used for eligible single-family homes, certain multi-family properties with up to four units, approved condominiums, and some manufactured homes.
Yes. FHA loans require mortgage insurance, which increases the overall cost of the loan. In some cases, borrowers may pay this insurance for as long as they keep the loan.
FHA loans are insured by the government, which allows lenders to offer more flexible qualification standards. Conventional loans are not government-backed and may require higher down payments or stricter credit and debt qualifications.
No. FHA loans can be helpful for many buyers, but they are not always the best fit. Buyers who can make a larger down payment or qualify for other programs, such as conventional or VA loans, may find a more cost-effective option.
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