Your Guide to FHA Loan Eligibility, Credit Score, and Down Payment Requirements.
Verify Your FHA Loan Eligibility
FHA loans are a great option for many home buyers, especially first-time buyers, because they have lower down payments and flexible credit score requirements.
Here’s why FHA loans are popular:
Lower Credit Score Requirements: You may qualify with a lower credit score compared to other loans.
Small Down Payment: Lenders allow as little as 3.5% down if you meet credit requirements.
Easier to Qualify: You can still get an FHA loan even with past financial issues like bankruptcy.
Lower Upfront Costs: Some closing costs can be added to your loan instead of paying them upfront.
These benefits make FHA loans a good choice for buyers who need more flexibility when purchasing a home.
Minimum Credit Score: 580+ for a 3.5% down payment; 500–579 for a 10% down payment.
Debt-to-Income (DTI) Ratio: Maximum 50% DTI (varies by lender and compensating factors).
Down Payment: 3.5% for credit scores 580+ and 10% for credit scores 500–579.
Loan Limits: $498,257 for single-family homes in most areas; Higher limits in high-cost regions.
Mortgage Insurance (MIP): Upfront Fee - 1.75% of loan amount (rolled into loan); Annual Fee - 0.55% of loan balance.
Property Eligibility: Must be a primary residence; Must meet HUD safety and livability standards.
Employment & Income: Two years of steady income; Verification of employment.
FHA loans help more people buy homes by letting them borrow most of the home's price based on their credit score.
If your credit score is 580 or higher, you can borrow 96.5% of the home’s value, meaning you only need a 3.5% down payment.
If your credit score is between 500 and 579, you may still qualify, but you’ll need a 10% down payment.
FHA loans make buying a home easier with lower down payments and credit score requirements, but they do come with a mortgage insurance premium (MIP).
This extra cost helps protect the lender in case the borrower can’t make payments.
FHA loans are famous for their low down payment requirements.
With a credit score of 580 or higher, you can qualify for a down payment as low as 3.5%. Even with a credit score as low as 500, you can still get an FHA loan, but you’ll need to put down 10%.
Even if you’ve had credit issues like bankruptcy or foreclosure, you can still qualify for an FHA loan. The minimum credit score requirement is 500, making it one of the most accessible loan options for borrowers with less-than-perfect credit.
FHA loans allow you to use gift funds from family, friends, or even employers to cover your down payment and closing costs. This makes it easier for first-time buyers to get into a home without needing significant savings.
The FHA 203(k) loan program allows you to finance both the purchase and renovation of a home in one loan. Whether it’s a new kitchen, a roof repair, or even adding a room, this loan can turn a fixer-upper into your dream home.
FHA loans can be used to purchase multi-family homes with up to four units, as long as the borrower lives in one of the units.
If you sell your home, the buyer can take over your FHA loan, assuming they meet the qualifications. This can be a huge selling point in a rising interest rate environment.
Navigating the homebuying process can feel overwhelming, but you don’t have to do it alone.
Our team of FHA loan experts is here to guide you every step of the way, ensuring you understand your options and find the best path to homeownership.
FHA loans offer flexible requirements, making it easier for first-time and low-to-moderate-income buyers to qualify.
Check your eligibility today and take the next step toward securing your future with an affordable mortgage.
