FHA Credit Score Requirments

580+  =  3.5%

Credit Score     Down Payment

500-579= 10%
Credit Score      Down Payment                                  



 The minimum credit score you need to purchase a home will depend on the type of home loan you qualify for. Before the 2007-2008 housing market crash, it was much easier for people with poor credit to find subprime loans.

Your FICO score is the first thing a mortgage lender will check when seeing if you qualify for a loan. While there are many factors involved in qualifying for a loan, your credit score is the most important.

Lenders were not as heavily regulated as they are today. In 2010, Obama signed the Dodd-Frank Wall Street reform into law. This law tighten up the requirements in the mortgage industry and made it more difficult to qualify for a loan. Especially people with low credit scores.

Typical minimum FICO scores by mortgage type:       


~FHA Loan – 580+ credit score (500-579 score is possible but unlikely)

~VA Loan – 620+ credit score (some lenders require 580)

~USDA Loan – 640+ credit score

~FHA 203K Loan – 620+ credit score

~Conventional Loan – 620+ credit 

Minimum Credit Score Required for a Mortgage Loan


Many first time home buyers believe they do not

qualify, however, FHA loans have low requirements.

If you have a poor credit rating the best home loan to

get is an FHA loan. FHA loans have the lowest credit

requirements of any mortgage, often referred to as bad

credit home loans. 


In order for the FHA to insure a mortgage loan the borrower must have at least a 500 credit score with a 10% down payment. However, getting approved for an FHA home loan with a credit score in the 500-579 range is very difficult, even with 10% or more down.

It’s highly recommended you follow the advice in this article to improve your credit before applying for a mortgage.


  If you have a 580 or higher FICO score you will just need a 3.5% down payment. Getting approved for an FHA mortgage with a 580+ score is much more likely than if your score was below 580. Speak to lenders about getting pre-approved for a home loan Check your Scores for Free The first thing you need to do before applying for a mortgage loan is to check your FICO score. There are a few reputable websites that give you all three credit reports and scores. These companies even have an app that will alert you when something on your credit profile changes. Idenity IQ and My FreeScoreNow.



Lenders look at more than just your credit score Mortgage lenders are becoming better at finding out about the borrowers ability to repay a mortgage because just seeing if you have a good credit score. One thing that will help you is if you can show that you have re-established credit and there was an economic event that caused the bad credit and you have since recovered from the financial hardship.

    Lenders will also look at your debt, if you don’t have much debt this is a strong compensating factor for bad credit. Compensating factors are factors that reduce the lenders risk, allowing them to approve borrowers with low credit scores. Mortgage companies will also want to see recent solid payment history with no late payments or collection accounts in the past 12 months.


A low debt-to-income ratio and solid employment history. Compensating Factors for Bad Credit Low loan-to-value ratio (High down payment 10%+) Large amount of money in savings High income Low debt-to-income ratio Long employment history with current employer Credit Score Ranges There are three major credit reporting agencies in the U.S. TransUnion, Experian and Equifax.


All three bureaus grade your credit history on a range from 350-850. Your score will be different from each credit bureau because not all creditors will report to all three companies.

A 700 credit score is generally considered good by many lending institutions.


Poor credit scores are generally any score below 620.

Credit Score Range

500-579 = Bad credit score

580-619 = Poor credit score

620-679 = Fair credit score

680-739 = Average credit score 740 and higher = Great credit score.