FHA loan requirements: credit score, down payment and income

An FHA loan is a home loan from a private lender, insured by the Federal Housing Administration (FHA), part of HUD, the federal housing department. You can qualify with a credit score as low as 500. A score of 580 or higher allows 3.5% down. Every FHA loan carries mortgage insurance, a fee that protects the lender if you stop paying.

These are FHA's own rules, taken from HUD's handbook for lenders, updated August 12, 2026. The lender that makes your loan applies them, so ask it for its written list. For the wider picture of buyer help, see our guide to first-time home buyer programs.

What credit score and down payment do you need?

The lender looks at one number, which HUD calls the minimum decision credit score. If three scores come back, it is the middle one. If only two come back and they differ, it is the lower one. With more than one borrower, the lowest score among them counts.

The percentages apply to the lower of the purchase price (less any gifts from the seller to induce the sale) and the appraised value (what an appraiser says the home is worth), which HUD calls the adjusted value. HUD's consumer page says FHA loans are available on homes with one to four units and that the down payment can be as low as 3.5%. The Consumer Financial Protection Bureau (CFPB), a federal agency, adds that FHA loans allow lower scores than most conventional loans and can be the cheapest choice for borrowers with lower scores or smaller down payments.

Not everyone has a score. For buyers with little or no credit history, HUD allows maximum financing, but the loan must be underwritten by hand, which means a person reviews your bills and records instead of a computer scoring you.

How much income and debt can you have?

HUD's handbook sets no dollar minimum or maximum income for the standard FHA purchase loan. Income limits you may see belong to other programs, such as state down payment help, which often add their own caps. What FHA checks is whether your income is steady and whether your debts leave room for the payment.

• Work history. The lender verifies your most recent two years of work and income, plus your current job.
• Debt ratios. The first ratio is your total monthly housing payment (loan, taxes, insurance and any association fees), divided by your monthly income. The second is all your monthly debt payments, including housing, divided by that same income. Both use the income the lender is allowed to count.

When a person underwrites the loan by hand, HUD's limits are these.

Most loans are first scored by an automated system, and HUD's handbook says a person must review the file by hand if the system returns a "Refer" result. Ask your lender which path your loan takes.

What past credit problems does FHA allow?

HUD's handbook treats these as waiting periods, not permanent bars.

• Chapter 7 bankruptcy: at least two years since the discharge. A shorter wait of 12 months or more may work if the bankruptcy was caused by events outside your control and you have managed money well since.
• Chapter 13 bankruptcy: at least 12 months of the repayment plan completed, with every payment on time, plus written permission from the bankruptcy court.
• Foreclosure or a deed in lieu of foreclosure (giving the lender the home to avoid foreclosure): generally three years before the date the case number is assigned. A short sale (selling for less than you owe) carries the same three years, with exceptions if you were current on your payments for the year before.
• Unpaid federal debts: a borrower with delinquent federal non-tax debt is not eligible until the debt is resolved.

Which homes and buyers qualify?

• You must live there. At least one borrower has to move in within 60 days of signing and plan to stay at least a year. FHA generally insures only one main home per borrower at a time.
• You need a valid Social Security number, with a few exceptions listed in the handbook. It says U.S. citizenship is not required, and it names lawful permanent residents and citizens of Micronesia, the Marshall Islands and Palau as eligible on the same terms as citizens. If your status is different, ask a lender before you spend money.
• The home must pass an appraisal. The appraiser reports whether it meets HUD's minimum property requirements, which say every insured home must be safe, sound and secure.
• First-time status is not required. The handbook does not make it a condition of the standard purchase loan.

What does FHA mortgage insurance cost?

Every FHA loan carries two charges. HUD's premium chart, in the same handbook, gives these rates for a loan of more than 15 years with a base amount up to $726,200.

Closing is the day you sign the final papers and the sale goes through. Loans above $726,200 and loans of 15 years or less have other rates in the chart.

A worked example. You buy a $300,000 home that appraises at $300,000 or more, with 3.5% down. The down payment is $10,500, so the base loan is $289,500. The upfront premium is 1.75% of that, or $5,066.25, and you can add it to the loan. The yearly premium is 0.55%, about $1,592 in the first year, or roughly $133 a month. This is arithmetic from HUD's rates, not a quote. Interest, taxes and homeowners insurance come on top.

What are the 2026 FHA loan limits?

FHA caps the loan by county. For 2026 the limit for a one-unit home is at least $541,287 and at most $1,249,125, according to HUD's Mortgagee Letter 2025-23. These limits apply to case numbers assigned on or after January 1, 2026, and HUD publishes new limits for each calendar year. Alaska, Hawaii, Guam and the Virgin Islands have a higher ceiling. Look up your county on HUD's mortgage limits tool.

Where do FHA loans fit with help for low-income buyers?

An FHA loan is a way to borrow. Many state and city programs pair a first mortgage like this with a down payment loan or grant, and they add their own income and price limits. Our guide to affordable homes for sale explains the below-market homes sold by lottery or waitlist.

As of October 5, 2026, we track 361 open homes for sale on our listings page, and the most are in Colorado, with 56. None mentions FHA in the text we collected, so ask the program which loans it takes. If you are unsure how your income compares with a program's cap, read about area median income, the middle income in your area, or use our qualify check. What you type stays in your browser.

How do you get started?

1. Check your credit reports and your score before you talk to a lender.
2. Add up your monthly debts and income and compare them with the ratios above.
3. Talk to a HUD-approved housing counselor. HUD's line is 800-569-4287, and the CFPB's counselor search lists approved agencies.
4. Ask two or three FHA-approved lenders for quotes and compare the total cost, as the CFPB suggests.