Flagstar mortgage review 2026: long terms, government-backed loans

Flagstar Bank is a leading mortgage lender with options for first-time homebuyers and low-income applicants, including down payment assistance programs and low-down payment loans that don't require mortgage insurance.

We like that Flagstar has fixed-rate terms for as long as 40 years and a flexible approval process with options for borrowers without a Social Security number or who need to use nontraditional credit sources.

Flagstar Bank has poor customer satisfaction ratings from J.D. Power, however, its loans are serviced by another lender.

Flagstar offers conventional, government-backed and jumbo loans in all 50 states and Washington, D.C.

• Fixed-rate: Borrowers keep the same rate for the life of their loan. Flagstar offers fixed-rate terms between 8 and 40 years. 
• Adjustable-rate: Adjustable-rate mortgages (ARMs) start with a fixed rate for a set period and then adjust at regular intervals. Flagstar offers ARMS that start with a fixed rate for the first five, seven or ten years.
• FHA loans: Backed by the Federal Housing Administration (FHA), FHA loans only require a 3.5% down payment for borrowers with a 580 FICO score or 10% down for borrowers with a 500.
• VA loans: Veterans and service members can apply for this lower-rate mortgage without a down payment or private mortgage insurance.
• USDA loans: Backed by the U.S. Department of Agriculture, USDA loans allow eligible homebuyers to get zero-down-payment mortgages in rural areas.
• Jumbo loans: A jumbo loan exceeds the conforming limits set by the Federal Housing Finance Agency. Flagstar issues jumbo loans for up to $3 million, according to its website but a spokesperson says it does not have an official maximum loan amount.
• HomeReady and Home Possible: Backed by Fannie Mae and Freddie Mac, this mortgage requires just 3% down and has lower financing and PMI costs. You should earn 80% of the area median income, have a credit score of 620 and a debt-to-income ratio of 50%.
• Professional loans: Flagstar has low-down-payment loans with no PMI for up to $1.5 million, available to medical professionals, attorneys and CPAs
• Construction loans: One of our top picks for construction loans, Flagstar offers construction-only and construction-to-permanent loans, Fannie Mae Homestyle Renovation Loans and FHA 203(k) standard and limited loans
• Non-qualifying mortgages: Non-QM loans are available to homebuyers who don't meet typical credit or income requirements.
• Manufactured home loans: Unlike many competitors, Flagstar approves financing for manufactured homes and mobile homes.

• Minimum credit score: 620 for conventional loans, 620 to 680 for jumbo loans, 580 for FHA loans, 580 for VA loans. Nontraditional credit can be used for some conventional and government-backed mortgages
• Minimum down payment: 0% for VA loans, 3% for conventional loans, 3.5% for FHA loans, 10% for jumbo loans
• Debt-to-income ratio (DTI): 45% to 55%

• Origination fee: Flagstar does not disclose its origination fee
• Prepayment penalty: Flagstar does not disclose its prepayment penalty fee
• Rate lock fees: Flagstar does not disclose any rate lock fees. 

Flagstar offers a variety of unique programs for homebuyers. 

Relationship discount

Flagstar customers who sign up for autopay using a Flagstar deposit account can qualify for a 0.25% discount on a home equity loan or HELOC.

Destination Home Mortgage

Homebuyers in select U.S. Census tracts are eligible for this 0% down payment mortgage with a fixed rate. No private mortgage insurance is required and borrowers can be approved with a credit score as low as 600.

Power Up Program

First-time homebuyers who meet location requirements can get up to $8,000 in grant and gift funds toward their home purchase.

Flagstar Gift Program

Eligible first-time homebuyers can receive up to 3% of their down payment or up to $3,000. (Buyers in Arizona, California, Florida, New Jersey and New York are eligible for up to $10,000.)

Detroit Land Bank Program

A low-down-payment loan for the purchase and renovation of a primary residence in select areas of Michigan, with no PMI and flexible qualifications.

Individual Tax Identification Number (ITIN) mortgages

Homebuyers without a Social Security number can be approved for a conventional mortgage using their individual tax identification number. A credit score of at least 620 is required.

Flagstar offers cash-out refinancing in all 50 U.S. states and Washington, D.C. It also provides HELOCs, home equity loans, Fannie Mae RefiNow and Freddie Mac Refi Possible.

• Credit score: 620 for rate-and-term and cash-out refinancing
• Debt-to-income ratio: 45%
• Home equity: 5% for conventional, 2.25% for FHA, 0% for VA and USDA, 10% for jumbo
• Home appraisal: Yes, though it may be waived

Flagstar Bank scored well below average on J.D. Powers' 2024 Mortgage Servicer Satisfaction Study, which looks at customer satisfaction with level of trust, ease of doing business, keeping borrowers informed and educated, staff, problem resolution and digital channels. 

It did earn an A+ from the Better Business Bureau, based on corporate transparency, truthful advertising, response to consumer complaints and other factors.

You can apply for a mortgage online and plug in a loan amount and ZIP code on the Flagstar website for rate quotes on government-backed fixed-rate loans, but rates for conventional loans are not provided online.

Flagstar only has physical branches in Arizona, California, Florida, Indiana, Michigan, New Jersey, New York, Ohio, and Wisconsin but customer service representatives are available by phone Monday to Thursday 9 a.m. to 8 p.m. ET, Friday 9 a.m. to 7 p.m. ET and Saturday 10 a.m. to 3 p.m.

An online chat feature on the Flagstar website will also connect you to live help.

We put Flagstar up against two leading mortgage providers.

Flagstar Bank vs. Rocket Mortgage

Both Flagstar and Rocket Mortgage lend in all 50 states but, while Rocket Mortgage is an online-only operation, Flagstar has 400 branches across nine states.

Rocket takes the lead with customer service, with remote closings, phone assistance on Sundays and top ratings for customer satisfaction by J.D. Power. Flagstar ranked below average on J.D Power's 2024 mortgage servicing survey and did not appear in its mortgage origination study.

Both lenders display sample rates online, although Flagstar only has information on FHA, VA and other fixed-rate government-back mortgages.

First-time homebuyers or borrowers looking for a specialized mortgage may want to gravitate toward Flagstar, which has a variety of grant programs for first-time buyers worth up to $10,000. It also has professional loans for doctors and lawyers and ITIN mortgages for borrowers without Social Security numbers.

Rocket only has a Purchase Plus program offering up to $7,500 to first-time buyers in parts of Atlanta, Baltimore, Chicago, Detroit, Memphis and Philadelphia. And while Flagstar has several low- and no-down payment mortgages, Rocket also has the 1% down Rocket ONE+ loan.

Read more: Rocket Mortgage review

Flagstar Bank vs. CrossCountry Mortgage

Both Flagstar and CrossCountry operate online and in brick-and-mortar locations, although CrossCountry has twice as many locations and is located in many more states.

The two lenders offer FHA, USDA and VA mortgages, as well as professional loans and non-qualifying mortgages that accept nontradtional credit sources. But while both offer home equity loans, only Cross Country has HELOCs and reverse mortgages.

CrossCountry comes out on top for customer service, too: It ranks above average on J.D. Power's Mortgage Servicers Satisfaction Survey and touts closings in as little as 10 days.

Read more: CrossCountry Mortgage review

You can apply for a Flagstar Bank mortgage online, over the phone at 866-809-4582 or in person at one of more than 400 branches.

To apply online, you'll need to create a MyLoan account and provide proof of identification, income documents and bank statements and submit to a credit check.

Preapproval is good for 90 days while your application goes through the underwriting process.

Flagstar Bank is a good choice for first-time homebuyers and borrowers looking for low-down-payment options. It also offers a variety of specialty mortgages, including construction loans, professional loans, ITIN loans and financing for manufactured houses.

It doesn't have the best track record for servicing loans, however: It ranked below average in J.D. Power's mortgage servicing study and, in 2024 sold its servicing business to Mr. Cooper. If dealing with the same lender from start to finish is a priority, you may want to look at other options.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of home loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best mortgage refinance lenders.