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While the 580 FICO score minimum is a major factor in how an applicant will pay for a mortgage, your credit score is not the only thing the FHA takes into account.

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May 26, 2019
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FHA.com is a privately owned website, is not a government agency, and does not make loans.

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FICO Scores Over 580 Help Borrowers Qualify For FHA Loans

Home buyers looking to take advantage of great FHA loan benefits should already know they need to establish the best possible credit rating. Applicants with a better credit rating increase their options for mortgage or refinance loans. In order to qualify for the low 3.5 percent FHA loan down payment, applicants will need a FICO score of at least 580. Those that don't meet that criteria will have to put a down payment of 10 percent on the mortgage they want.

FHA loans are designed to help home buyers, so these government-insured loans usually come with more lenient requirements than typical mortgages or refinancing terms from traditional lenders. While the benefits don't vary much between someone with good credit and excellent credit, there is a very noticeable margin for those with bad credit and average to good credit.

Why You Need a Better Credit Score

While the 580 FICO score threshold is a major factor in how an applicant will pay for a mortgage, your credit score isn't the only thing the FHA takes into account. Payment history, bankruptcies and foreclosures are also issues that the agency looks at. While these factors may hurt your credit score, they don't necessarily eliminate you from loan eligibility.

That doesn't mean, however, that you can neglect your credit. While the FHA is lenient enough to help those with bad credit ratings, they also require recent credit history to be in good standing.

Extenuating circumstances like job loss, injury or anything else that prevented you to pay in a timely manner can, and most likely will, be taken into account. However, if you have demonstrated you purposely neglected payments or your credit rating, your chances of qualifying for an FHA loan will be reduced.

Be Safe, Not Sorry With Your Credit

Obviously, it's better to have good credit than bad credit when applying for any loan. Don't take your credit history for granted, though, because you might find an error or inaccuracy that could hurt your chances of qualifying for an FHA loan. Instead of going through the headache of disputing your application with your agency and holding up the process, be proactive and make sure your credit score and ratings are where they should be before approaching the FHA.

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FHA Loan Articles and Mortgage News

First-Time Home Buyers and FHA Mortgage Loans

May 9, 2019 - Worried about the down payment for a home purchase? Some borrowers would rather hang on to their cash for home improvement projects, bills, student loans, or new furniture. FHA  loans are designed to help with down payment issues in addition to providing more flexible credit requirements.

What to Do Before Refinancing

May 8, 2019 - Remember, it’s better to take longer to prepare for your refinance if you need to in order to fix things like payment history (a recommended 12 months of on-time payments for all bills) or correct identity theft issues on a credit report.

How Do FHA Loans Work?

May 5, 2019 - FHA home loans are not specifically intended for first-time home buyers, but many house hunters who have never purchased real estate before turn to the FHA home loan program because of the low down payment requirements and other borrower benefits.

Things That Can Affect Your Mortgage Interest Rate

May 4, 2019 - If you are thinking about buying a home and want to apply for a mortgage loan to purchase your first home, there are some variables that can affect the interest rate you are offered when you are ready to commit to purchasing the real estate.

FICO Scores Needed To Qualify for Your FHA Loan

April 28, 2019 - The FHA loan program itself establishes a FICO score minimum of 500 or higher. Those with FICO scores between 500 and 579 can technically qualify for an FHA home loan but they will be required by FHA loan program rules to make a 10% down payment.

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!