FHA Graduated Payment Mortgage
If the FHA Graduated Payment Mortgage is on your radar for 2026, here is how it works, who it fits, and what to watch for.
How it works
The FHA Graduated Payment Mortgage (Section 245) starts with lower payments that rise on a set schedule, aimed at borrowers who expect their income to grow.
Key things to know
- Minimum 3.5% down with a 580+ credit score (10% down for 500-579).
- Loan amounts are capped by your county FHA limit — $541,287 floor up to $1,249,125 in high-cost areas.
- FHA mortgage insurance applies; budget the 1.75% upfront premium plus annual MIP.
- The home must be your primary residence and meet FHA's minimum property standards.
Program rules are set by HUD and updated periodically. Join the free notification program to hear about changes to the FHA Graduated Payment Mortgage first.
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Frequently Asked Questions
- What is the FHA Graduated Payment Mortgage?
- The FHA Graduated Payment Mortgage (Section 245) starts with lower payments that rise on a set schedule, aimed at borrowers who expect their income to grow.
- What credit score and down payment are required?
- Like other FHA loans, 580+ qualifies for 3.5% down; 500-579 requires 10% down.