If you’re thinking of buying a home but your credit score is less than perfect, you still have options. Federal Housing Administration (FHA) loans have some of the most flexible borrowing requirements and loan limits on the mortgage market thanks to a government insurance guarantee.
To qualify for an FHA loan, borrowers need a minimum credit score of 500 with a 10% down payment or 580 with 3.5% down. By offering a flexible down payment requirement based on credit score, this loan option offers millions of Americans the opportunity to become homeowners.
Here’s an in-depth look at what you should know about the required credit rating for an FHA loan.
Key Takeaways:
- To qualify for an FHA loan, the minimum credit score is 500 with a 10% down payment or 580 with 3.5% down.
- The FHA doesn’t originate or fund mortgages, but it insures the loans so lenders can recoup their investment if you default on payments.
- FHA loans offer plenty of flexibility but tend to have higher borrowing costs due to mandatory mortgage insurance premiums paid up front and annually.
What Is An FHA Loan?
An FHA loan is insured by the government to protect lenders if a borrower defaults on their mortgage payments. The FHA itself doesn’t originate loans; it sets base guidelines and works with approved FHA lenders who lend directly to consumers.
Oftentimes, borrowers will choose an FHA loan if they don’t meet the requirements for a conventional loan. Conventional lenders previously required a minimum credit score of 620, with some programs allowing you to put just 3% down, compared to FHA’s slightly higher 3.5% minimum down payment.
In late 2025, Fannie Mae removed the 620 minimum credit score requirement for certain programs. But lenders still set their own credit standards, and many require a credit score of 620 or more, making FHA loans the primary option for borrowers with lower credit scores.
FHA loans come with mandatory mortgage insurance premiums (MIP), which are paid up front and annually, typically for the life of the loan. That makes FHA mortgages more expensive over the long run.
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FHA Minimum Credit Score Requirements
To qualify for an FHA loan, the minimum credit score is 500 with a 10% down payment or 580 with 3.5% down. Plus, each FHA lender has their own FHA loan requirements and may have higher minimum credit score requirements and other rules, known as mortgage overlays.
Credit Score Tiers
While the FHA allows for a minimum credit score of 500, the reality is not all lenders will follow. Here’s a breakdown:
| Credit Score Range | Minimum Down Payment | Typical Lender Acceptance |
|---|---|---|
| 580 or higher | 3.5% | Widely available |
| 500 to 579 | 10% | Limited lender options |
| Below 500 | Not eligible | Not allowed by FHA |
You likely will need at least a 580 credit score to unlock the FHA’s popular 3.5% down payment. But if your score is lower, you’ll need to make a down payment of more than double that: 10%. Some lenders have a minimum credit score of 620 for FHA loans, regardless of the agency’s more lenient guidelines.
Keep in mind that the lower your credit score, the harder it may be to get preapproved for a mortgage and the more you’ll pay in interest.
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How Credit Scores Are Calculated For FHA Loans
Lenders pull a tri-merge credit report, or a 3-in-1 report, that combines information from all three major credit bureaus: Equifax, Experian and TransUnion. They use the median score of the three in the loan approval process.
Here’s an example: If your scores are 590, 610 and 625 from the bureaus, lenders will use 610 to qualify you for the mortgage program you want, while the other two are ignored. If you’re applying with a co-borrower, lenders use the lower of the median two scores. In other words, if your co-borrower’s median score is 580 and yours is 610, the lender will use 580 to qualify you together.
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Other FHA Loan Borrowing Requirements
Your credit rating for an FHA loan isn’t the only factor lenders evaluate. Here are other key FHA loan requirements:
- Minimum down payment: Your down payment can be as little as 3.5% of the home’s purchase price (with a credit score of 580 or higher), or 10% (with a credit score of 500 – 579).
- Maximum debt-to-income ratio (DTI): Your debt-to-income ratio is calculated by dividing all of your monthly revolving debts and installment debts, including the new mortgage payment, by your gross monthly income to get a percentage. FHA’s maximum DTI is 43%, but some FHA lenders can go up to 50% – 57% with certain compensating factors.
- Occupancy: The home must be used as a primary residence for 12 months; rental properties are not eligible.
- Property type: It must be a single-family home, townhome or row home; a HUD-approved manufactured home; or a unit within an FHA-approved condominium project.
- Appraisal: The property must undergo and pass a stringent FHA property appraisal, which ensures the home meets all HUD safety standards.
- Mortgage insurance premiums: FHA loans have two types of mortgage insurance premiums (MIP) — upfront and annual MIP. Upfront FHA MIP is 1.75% of the loan amount and is paid at closing. Annual FHA MIP ranges from 0.15% – 0.75% of the loan amount (depending on loan amount, loan-to-value ratio (LTV) and loan term) and is paid monthly. FHA MIP is paid for the life of the loan if you put down less than 10%. With 10% down, it ends after 11 years.
- U.S. citizenship: Applicants are required to show proof of U.S. citizenship or lawful permanent residency.
2026 FHA Loan Limits
FHA mortgage loan limits vary based on the median home price in your area and adjust annually. FHA loan limits typically follow the direction of the Federal Housing Finance Agency’s conforming loan limits for Fannie Mae and Freddie Mac loans, which adjust annually based on the average U.S. home price. You can look up your specific county’s loan limit with the FHA’s loan limit search tool.
FHA Standard Loan Limits
| Single-Unit Homes | Two-Unit Homes | Three-Unit Homes | Four-Unit Homes |
|---|---|---|---|
| $541,287 | $693,050 | $837,700 | $1,041,125 |
FHA High-Cost Area Loan Limits
| Single-Unit Homes | Two-Unit Homes | Three-Unit Homes | Four-Unit Homes |
|---|---|---|---|
| $1,249,125 | $1,599,375 | $1,933,200 | $2,402,625 |
FHA Special Loan Limits For Alaska, Guam, Hawaii And The Virgin Islands
| Single-Unit Homes | Two-Unit Homes | Three-Unit Homes | Four-Unit Homes |
|---|---|---|---|
| $1,873,687 | $2,399,050 | $2,899,800 | $3,603,925 |
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FHA Loan Credit Score FAQ
Want to go deeper into FHA minimum credit scores? Here are some commonly asked questions.
The Bottom Line: FHA’s Low Credit Score Requirements Offer Flexibility
The FHA minimum credit score of 580 for its maximum financing option opens doors to homeownership that conventional loans have traditionally shut for some borrowers. But even if you qualify with a lower credit score, know that there are lender overlays, interest rate impacts and alternative loan options to consider as well.
While a 500 credit score with 10% down may qualify you for an FHA mortgage, you could have difficulty making on-time payments if your credit needs work and you have a heavy debt load.
If your credit does indeed need some work, the good news is improvement is within your reach. Focus on what you can control: paying on time, keeping credit balances low and chipping away at overall debt. Progress in those areas can be made rapidly, and your score will reflect it.
Homeownership may be closer than you think, and FHA loans are designed to meet you where you are. Compare lenders to understand your options.
Ben Shapiro
Ben Shapiro is an award-winning financial analyst with nearly a decade of experience working in corporate finance in big banks, small-to-medium-size businesses, and mortgage finance. His expertise includes strategic application of macroeconomic analysis, financial data analysis, financial forecasting and strategic scenario planning. For the past four years, he has focused on the mortgage industry, applying economics to forecasting and strategic decision-making at Quicken Loans. Ben earned a bachelor’s degree in business with a minor in economics from California State University, Northridge, graduating cum laude and with honors. He also served as an officer in an allied military for five years, responsible for the welfare of 300 soldiers and eight direct reports before age 25.
