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The FHA usually requires two lines of credit for qualifying applicants. An FHA loan might make the difference between owning your dream house comfortably and turning it into a financial nightmare.

FHA Rates Near 50 Year Low!

Now is the time to drop the interest rate on your 30-year mortgage or refinance into a 15-year home loan.

FHA Rates for September 21, 2020
Are You Watching Your Credit Score?

NOTICE: Some FHA mortgage lenders are substantially raising FICO score requirements during the Coronavirus crisis, even though FHA minimums remain unchanged.


- Improving Your Credit Score Has Never Been More Important -

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

Credit Requirements for FHA Loans

Good Credit History Makes it Easier to Qualify

FHA loans provide great assistance to many first time home buyers by offering mortgage loans with lower down payments. While this is a benefit for many people, recent changes in policy may have put the loans just out of reach for some would-be homeowners with questionable credit history.

Credit History and Score Requirements

FICO Scores

For those interested in applying for an FHA loan, applicants are now required to have a minimum FICO score of 580 to qualify for the low down payment advantage, which is currently at around 3.5 percent.

If your credit score is below 580, however, you aren't necessarily excluded from FHA loan eligibility. Applicants with lower credit scores will have to put down a 10 percent down payment if they want to qualify for a loan.

So if you're planning to buy a house, and your credit score doesn't meet the minimum, you should weigh the advantages and disadvantages of putting down a larger down payment or using those funds to try and improve your credit score first.

Benefits of an FHA Loan

The reason why FHA loans are so popular is because borrowers that use them are able to take advantage of benefits and protections unavailable with most traditional mortgage loans. Loans through the FHA are insured by the agency, so lenders are more lenient. Here are a few benefits you can enjoy with an FHA loan:

  • Easier to Qualify
    While most loans exclude applicants with questionable credit history and low credit scores, the FHA makes loans available with lower requirements so its easier for you to qualify.
  • Competitive Interest Rates
    You've heard the horror stories of subprime borrowers who couldn't keep up with their mortgage interest rates. Well, FHA loans usually offer lower interest rates to help homeowners afford housing payments.
  • Lower Fees
    In addition to lower interest rates, you can also enjoy lower costs on other fees like closing costs, mortgage insurance and others.
  • Bankruptcy / Foreclosure
    Just because you've filed for bankruptcy or suffered a foreclosure in the past few years doesn't mean you're excluded from qualifying for an FHA loan. As long as you meet other requirements that satisfy the FHA, such as re-establishment of good credit, solid payment history, etc., you can still qualify.
  • No Credit
    The FHA usually requires two lines of credit for qualifying applicants. If you don't have a sufficient credit history, you can try to qualify through a substitute form.

For many home buyers, using an FHA loan can really make the difference between owning your dream house comfortably or turning it into a financial nightmare. The FHA provides a wealth of benefits for applicants that qualify, so make sure you're making full use of them.

Credit Scores for FHA Loans

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FHA Loan Articles and Mortgage News

FHA Loan Limits: Facts You Should Know

September 21, 2020 - What facts do you need to know about FHA home loan limits? Facts such as FHA loan limits may vary depending on county and that FHA mortgage limits are higher in high-cost areas like  California, New York, and Hawaii?

Why Do Lenders Deny Home Loan Applications?

September 8, 2020 - Why do lenders deny home loan applications? This is a good question to ponder when you are in the planning stages of a construction mortgage loan application, condo loan application, or you want to buy a multi-unit home.

Home Loans and Credit Repair 101

September 3, 2020 - It’s important to know WHY you need to address your credit long before applying for a major line of credit like a construction loan to build on your own land, or the purchase of a condo or suburban home. Your lender must review your credit patterns over the long-term to judge your creditworthiness.

Two Ways of Protecting Your Credit During Coronavirus

August 25, 2020 - Homeowners who have government backed mortgages such as VA and FHA home loans have built-in protection during COVID-19 in the form of federally-directed loan forbearance and mortgage relief options. Protecting your credit means making all payments on time, every time.

FHA Common Questions About Home Loan Options

August 22, 2020 - FHA home loans have lower down payment requirements than some conventional mortgages, there are more forgiving FICO score standards (lender standards will also apply), and first-time home buyers should know there are down payment assistance programs in many states that can help.