FHA Loan Calculator for Alabama

FHA Loans in Alabama

FHA loans require a minimum 3.5% down payment (10% if credit score is 580-619). On Alabama's median home of $167,000, that's a minimum down payment of $5,800.

FHA Loan Limits in Alabama

FHA loan limits vary by county and are tied to conforming limits. In most Alabama counties, the FHA floor limit is $498,257 (2024). High-cost areas like certain counties may qualify for higher limits up to $1,149,825. Most Alabama markets fall well within conforming loan limits, making conventional financing widely accessible.

FHA vs Conventional in Alabama

FHA MIP (Mortgage Insurance Premium) is required regardless of down payment. Conventional loans eliminate PMI at 20% equity. With Alabama's median home at $167,000, buyers who can put down $33,400 (20%) are better served by conventional financing. FHA makes sense for buyers with limited savings or credit scores below 740.

Closing Costs

Alabama closing costs average $2,100. Alabama does not impose a mortgage recording tax, keeping closing costs low compared to the Southeast average. Sellers can contribute up to 6% of the purchase price toward FHA buyer closing costs.

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