What’s the Minimum Credit Score Needed to Get an FHA Loan?

An FHA loan is a home mortgage backed by the U.S. government. The FHA itself doesn’t provide mortgages but, rather, insures mortgages issued by FHA-approved lenders, like banks and credit unions.^2,3 The insurance protects these lenders in the event that a borrower defaults on a mortgage.⁴

FHA loans might be used to buy or refinance a variety of residential properties, including single-family houses, multifamily homes, and residential care facilities.⁴

FHA loans are especially popular with first-time homebuyers who have limited savings.

FHA loans have historically helped low- to moderate-income families attain homeownership – hence, the low down payment. They may also allow for more lenient credit scores than the minimum 620 FICO score typically required for many conventional home loans. To qualify for an FHA loan with a 3.5% down payment, for example, you’ll need a minimum FICO credit score of 580. If your credit score is lower – between 500 and 579 – you may still be eligible for an FHA loan, but you’ll need to make a higher down payment of 10%.³

One key caveat: While these FICO scores are the minimum credit requirements set by the FHA, borrowers with credit scores between 500 and 580 may have a hard time securing an FHA loan. That’s because many FHA-approved lenders still look for a FICO score of at least 620 to qualify – and the FHA can’t force banks to conform to the agency’s lower FICO score requirements.³

The FICO score on your credit report isn’t the only factor the FHA considers. The agency also looks at your income, debt-to-income ratio (DTI), and any past history of foreclosures. However, the agency may consider extenuating circumstances, such as a job loss or injury, so if your credit report has a sore spot or two, you may still qualify for an FHA loan.³

Nevertheless, anyone hoping to purchase a home in the near future may want to work on establishing the best credit rating possible. The FHA requires your recent credit history to be in good standing, and many lenders want to see that borrowers have made reliable payments on debts.^2,3 Plus, in many cases, the higher your credit score, the lower your interest rate.

The FHA doesn’t offer loans directly, so you’ll have to apply through a private lender, such as a bank or credit union.^2,3 Generally, FHA loans entail the following requirements:³

• Credit score: While the FHA has set the minimum credit score at 500, many FHA-approved lenders require higher minimum FICO scores of at least 620.
• Down payment: Obtaining an FHA loan requires you to make a down payment. That payment will depend on the percentage you qualify for based on your credit score.
• Debt-to-income ratio: Your debt-to-income ratio weighs how much money you owe against how much you earn. The FHA allows you to have a DTI of 43%.
• Mortgage insurance premiums: Borrowers who take out FHA loans are required to pay mortgage insurance premiums, which are often rolled into the total amount of the loan and paid on a monthly basis.
• Property requirements: The home must be the borrower’s primary residence. In 2024, FHA loan amounts cannot exceed between $498,257 and $1,149,825, depending on location.⁵ Loan limits vary by county, with higher limits in sections of the U.S. where housing is more costly. The FHA also requires an appraisal of the home to make sure the house is worth what the borrower is paying and has no safety issues.
• Personal and financial paperwork: The borrower must have a valid Social Security number, earn a steady income, and provide documentation related to employment, assets, and debts. In addition to running credit checks, lenders also request recent bank statements.