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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 June 16, 2021
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

Home Loans And FICO Scores

June 9, 2021 - What do you need to know about home loans and FICO scores? To get started, it’s important to know what FICO score ranges are considered good, and how these ranges are viewed by lenders. Your credit scores matter, but how should they be interpreted?

Building Credit Ahead of a Home Loan Application

June 2, 2021 - Many first-time home buyers feel at a loss when it comes to working on their credit. Don’t apply for your first credit card and your first home loan in the same year. A lender will be looking at your credit habits for at least the 12 months leading up to your credit application.

Home Loans, Credit Repair and Down Payment Assistance

May 30, 2021 - There are common questions about fixing your credit, and there are just as many questions in this area as there are in the area of home loan down payments. And sometimes those issues are actually interconnected. Do you know how?

What to Know About Being a First-Time Home Buyer

May 28, 2021 - There is a huge myth about certain types of home loan (FHA mortgages specifically) that prevents some people from considering FHA loans as an option--we’ll explore that myth below and why you should take note even if you have purchased a home before and want to do so again.

Credit Prep for Your Home Loan

May 26, 2021 - What kind of preparations do you need to make before you apply for a home loan? Buying a home is one of the most important investments an American borrower can make and you’ll have an easier time in the process if you can get and stay organized.