When it comes to mortgages, Federal Housing Administration (FHA) loan credit score requirements are on the lower end of the scale. It’s ideal for people with low credit score to possibly qualify for a home loan. The minimum credit score required is 580, coupled with a 3.5 percent down payment. 

The FHA Loan: An Overview

Let’s take a look at what goes into an FHA loan in the first place. These are meant for borrowers whose income falls under low to moderate. As previously mentioned, the down payment required for these is at 3.5 percent. Those funds can be sourced as a gift from relatives or close friends. 

Needless to say, when the score is below 600 (the aforementioned 580 minimum, for example), it’s vital to find a lender that can apply manual underwriting as an application goes through. Lower credit scores mean a more challenging time getting any sort of approval.

Many homebuyers prefer FHA loans because of how relaxed the underwriting is, higher flexibility, and debt-to-income ratio included. This is still part of the conversation if the likes of bankruptcy are involved. 

FHA loans appeal to buyers with limited cash as well since the standards regarding closing cost sources are less rigid. People whose credit is marginal and need maximum seller assistance are the general target audience for FHA loans. They typically receive assistance through seller credits received upon closing, which helps cover the full amount of closing costs.

FHA loans come in several types, including the likes of:

  • 203(k) loans – Buying and fixing up a home
  • Purchase loans – Meant for the purchase of a home
  • Streamline refinances – Meant for an FHA loan to be refinanced to a new one without a credit check or other underwriting process steps

FHA Credit Score Requirements Vary per Mortgage Lender

This is worth noting because some people assume that the requirements are the same across all mortgage lenders as long as it’s an FHA loan. In truth, mortgage lenders have the flexibility to choose the loans they offer and what their minimum for acceptable credit scores is. FHA-approved lenders may also have additional standards of their own to add, usually referred to as “overlaying,” which depends on their risk tolerance.

In fact, some lenders on a major scale flat-out forego offering FHA loans at all nowadays.

What Are FHA Loan Requirements That Should Be Met?

  • FHA Debt-to-Income Ratio – DTI, or debt-to-income ratio, will come up in conversation as FHA loan qualification will come up. The usual maximum ratio generally comes to 43 percent. However, some lenders can make exceptions all the way to 57 percent through an FHA loan.
  • FHA Loan Limits – These generally dictate the loan amount that can be taken out, depending on the property being financed and where the purchase will be made. As of this year, the FHA loan limit for a single-family home is at an average of $356,362 for most counties. In some higher-cost areas, that can go up to $822,375.


Federal Housing Administration (FHA) loans often have lower credit score requirements than other options. The down payment required for this is generally on the lower end, around 3.5 percent. In terms of credit score eligibility, people with scores as low as 580 can qualify.

Living in Hawaii or California and need to get FHA home loans? NetLending can help you get financing quicker! We believe each homebuyer deserves their dream home. Reach out to us today!