On this page
- What are FHA credit score requirements in 2026?
- What credit score do you need for an FHA loan or other mortgage?
- FHA beats conventional loan flexibility
- Why might lenders require a higher credit score for an FHA loan?
- FHA policy updates have made it easier for low-credit borrowers to qualify
- When can lower credit score borrowers apply for an FHA loan?
- FHA loan FAQs
- Credit scores used by mortgage lenders
- Raising your credit score and first-time buyer programs
- Low credit scores and down payments
- Credit score ranges and mortgage options
- Higher scores and alternative mortgages
Borrowers may be eligible for a low credit score FHA loan. In 2015, FHA added a new measure of lender performance, meant in part to ease the pressure on lenders that approve borrowers with lower scores.
The goal is to keep home ownership within reach for borrowers with lower credit scores.
Check your FHA home buying eligibility here (Nov 10th, 2026)
What are FHA credit score requirements in 2026?
The Federal Housing Administration (FHA) requires a credit score of at least 500 to buy a home with an FHA loan. You need a minimum score of 580 to make the minimum down payment of 3.5% of the total loan amount. However, some lenders require a score of 620 to 640 to qualify.
FHA’s 2015 policy update was meant to make lenders more willing to approve borrowers with lower scores. Many lenders still ask for a score of 620 or higher.
That update did not change FHA’s own minimum scores of 500 and 580. Each lender decides whether to apply stricter rules.
Since its inception in 1934, the FHA loan program has insured more than 50 million mortgages. Its extreme popularity is a direct result of its flexibility. The program was built from the ground up to promote homeownership among a portion of the population that would not otherwise qualify.
Check your FHA home buying eligibility here (Nov 10th, 2026)
What credit score do you need for an FHA loan or other mortgage?
It’s possible to get an FHA loan with a credit score of 580 or 500, depending on the size of your down payment. VA and USDA loans have no set minimum credit score, and Fannie Mae dropped its fixed 620 minimum for automated underwriting in November 2025. Even so, most lenders will require a credit score of at least 620.
Of course, remember that the minimum score will tell you what’s required to qualify, but a lower credit score also usually means higher interest rates.
This table outlines the minimum credit scores typically needed to buy a house based on the type of loan: conventional, FHA, VA or USDA.
| Loan Type | Minimum FICO Credit Score | Intended For |
|---|---|---|
| FHA | 580 with a 3.5% down payment or 500 with 10% down | Homebuyers with low- to moderate-income |
| VA | No set minimum from the VA although most lenders will require a 620 or higher credit score (some may allow a score as low as 580) | Veterans & active military |
| USDA | No set minimum from the USDA although most lenders will require a score of at least 640 | Buyers purchasing a home in a designated rural area |
| Conventional | No fixed minimum in Fannie Mae automated underwriting since November 2025, but most lenders ask for 620 or higher | Buyers who want a traditional mortgage |
FHA beats conventional loan flexibility
Conventional loans offered by mortgage giants Fannie Mae and Freddie Mac certainly have their place in the market. But they are not very flexible regarding certain loan criteria. FHA fills in the gaps by offering mortgage approvals to those with:
Check your FHA home buying eligibility here (Nov 10th, 2026)
- Medium to low credit
- Lower income
- Income from numerous sources
- Co-borrowers who do not plan to live in the home (non-occupant co-borrowers)
- Down payment gift money, but no down payment of their own
- Properties that are in need of repair
Without FHA, millions of homeowners would be stuck renting years longer than they should. Yet, there is still room for FHA to expand its capacity to serve more aspiring homeowners.
Why might lenders require a higher credit score for an FHA loan?
Banks and mortgage companies that offer FHA loans are not required to follow FHA guidelines to the letter.
These are private, for-profit companies that simply approve loans based on guidelines provided by the government agency. But most important to the lender is whether a borrower will be able to make the monthly payments for the loan amount, which means they will evaluate your personal finances more holistically, and will look at factors besides your credit score, including your monthly income and debt-to-income (DTI) ratio.
Check your FHA home buying eligibility here (Nov 10th, 2026)
Many lenders across the country impose tougher guidelines for FHA loans than the FHA itself. It doesn’t seem to make a lot of sense until you realize that FHA penalizes lenders for approving too many bad FHA loans.
Statistically, borrowers with lower credit scores default more often. That’s why many lenders require a higher minimum credit score than the FHA.
Here are credit score minimums as stated by FHA:
- Credit score at or above 580: Eligible for 3.5% down payment
- Credit score of 500-579: Must put 10% down, but still eligible
- Credit score below 500: Not eligible for FHA financing
Most lenders still require a score of at least 620 to 640. Minimums differ from lender to lender, so compare offers.
FHA policy updates have made it easier for low-credit borrowers to qualify
In 2015, the FHA added another layer of evaluation to their current method of identifying high-risk lenders.
Check your FHA home buying eligibility here (Nov 10th, 2026)
Former policy
The FHA’s sole method was to compare an FHA lender with other FHA lenders in the same geographical region. This is known in the lending world as the FHA “compare ratio.”
If a lender’s rate of early defaults and claims was above the national rate and more than twice the area rate (a 200% compare ratio), FHA could end its authority to make loans in that area.
Many banks and mortgage companies had a problem with this method. If nearby lenders had tougher FHA qualification standards and therefore a better book of loans, other area lenders would look comparatively worse.
In theory, an FHA lender could be shut down because the FHA lender across the street raised its minimum credit score requirement from 640 to 680.
This can and did lead to an escalation of sorts. Lenders raised their minimum FHA credit score requirements as high or higher than their competitors. FHA’s own policies counteracted its mission to provide access to homeownership to less-than-perfect borrowers.
Updated policy
While the FHA did not end the “compare ratio” method altogether, it added another layer of evaluation.
Now, the FHA separately examines late-paying loans based on the borrowers with credit scores of:
- Less than 640
- Between 640 and 680
- Greater than 680
How does this help borrowers with lower scores?
A lender is no longer at risk of losing its FHA credentials if its lower credit score loans are performing similarly to loans within the same credit score bracket. In addition, FHA will make the comparison nationwide, not just in the lender’s geographical region.
Here’s how it might look in real life. Lender X issues 100 loans to borrowers with scores below 640. Three qualifying borrowers eventually stop making their payments, giving Lender X a “bad loan” rate of 3%.
Lender Y across the street issues 100 loans to borrowers with scores above 680. Only one doesn’t pay his mortgage, giving Lender Y a default rate of 1%.
Under the old rules, Lender X might be in trouble. His “compare ratio” is 300%, well above the 200% limit. At this point, Lender X raises its minimum FHA credit score to 680.
Under the current rules, Lender X might be just fine, because FHA compares its default rate to the national average for loans with credit scores below 640.
Now, Lender X can continue helping underserved home buyers, in tune with FHA’s core mission.
In short, this policy may help to maintain the number of lenders available to borrowers with credit scores that do not meet the minimum requirements of non-FHA loans.
Check your FHA home buying eligibility here (Nov 10th, 2026)
When can lower credit score borrowers apply for an FHA loan?
FHA introduced the policy in 2015, so your chosen lender has probably set its own rules already.
Typically, there’s a step-down effect across the lending landscape. One lender will slightly loosen guidelines, followed by others until a majority function similarly. If the new standards work, lenders loosen a bit more.
FHA loan FAQs
What credit score do you need to buy a house?
FHA requires a credit score of at least 500, and a score of 580 or higher to put down as little as 3.5%. Many lenders ask for more. The specific numbers required are often considered jointly with the size of the down payment. VA and USDA loans have no set minimum score, but most lenders ask for 620 to 640. Conventional lenders usually ask for at least 620.
What credit score do you need to buy a house for the first time?
There is a selection of mortgage loan programs intended for first-time homebuyers that allow for lower credit scores, including FHA loans available for borrowers with scores as low as 500 (though such loans will require a downpayment of 10%). FHA loans with just a 3.5% downpayment are available to borrowers with a credit score of 580 or higher.
Can I get a home with a 500 credit score?
Technically, yes, though it is difficult. Because there is no law stipulating a minimum credit score needed to buy a house, a lender can, generally speaking, offer loans at their discretion, no matter the borrower’s credit history. Still, it’s increasingly rare for lenders to approve home mortgages for borrowers with credit scores of 500. An FHA loan is likely to be the only type available in this scenario, and most FHA loans given to borrowers with a credit score of 500 require a 10% down payment.
Credit scores used by mortgage lenders
Which FICO score do mortgage lenders use?
Most lenders determine a borrower’s creditworthiness based on their FICO score, a credit scoring model and risk analysis system developed by Fair, Isaac, and Company in 1956. FICO scores have different names at each of the three major United States credit report companies: Experian, Equifax, and TransUnion. These three are most commonly referred to when a mortgage lender is determining whether to provide you with a loan. Newer scores are arriving. Fannie Mae and Freddie Mac now also accept VantageScore 4.0. For FHA case numbers assigned on or after January 1, 2027, lenders can use VantageScore 4.0 and FICO 10T. FHA’s minimum scores of 500 and 580 do not change.
Check your FHA home buying eligibility here (Nov 10th, 2026)
Raising your credit score and first-time buyer programs
How quickly can I raise my credit score?
Credit scores are the results of many variables (payment history, credit utilization ratio, length of credit history, credit mixture), some of which are calculated quickly, and others that can require weeks or months to accurately compute. Unfortunately, that means there is no accurate way to fully predict how long it will take to earn a better credit score. However, you can begin by focusing on accruing a history of consistent payments, which is the most influential factor in a credit score.
What credit score does a first-time home buyer need?
A first-time home buyer will need a credit score of at least 500 to buy a home with an FHA loan. However, the FHA will require a larger down payment of 10%. If you have a credit score of at least 580, you may qualify for an FHA loan with a 3.5% down payment requirement.
What disqualifies you as a first-time home buyer?
In order to qualify for first-time homebuyer programs, you cannot have any record of property ownership or co-ownership in the last three years. Beyond that, you’ll need to meet the minimum mortgage requirements set by your lender. That’s because the lender wants to make sure you can keep up with the mortgage payments. For example, if you have too much credit card debt that leads to a high debt-to-income ratio, a lender may not approve your mortgage application.
Low credit scores and down payments
What is the lowest credit score FHA will accept?
You may be able to obtain an FHA loan with a credit score as low as 500 but that low credit score comes with an increased down payment requirement. If you have a credit score of at least 580, you may be able to obtain a loan with 3.5% down.
Can I get a first-time home loan with a 650 credit score?
Many lenders are willing to work with first-time home buyers who have a credit score of at least 650. Although you can likely get a loan, you might not get the best interest rate with a 650 credit score.
What credit score is needed to buy a house with 5% down?
You’ll need a credit score of at least 580 to use an FHA mortgage to obtain a home with 5% down. However, a credit score between 500 to 579 will require a down payment of 10% for an FHA loan.
Is 700 a good credit score to buy a house?
A credit score of 700 or higher is a good credit score. In most cases, that is more than sufficient to buy a house. However, your income and debt obligations must also meet the lender’s standards.
Check your FHA home buying eligibility here (Nov 10th, 2026)
Credit score ranges and mortgage options
What is the normal credit score to buy a house?
Most lenders want a credit score of at least 620 for a conventional mortgage. Since many buyers choose a conventional loan, a 620 credit score might be considered normal.
However, you can have a credit score below 620 and still buy a house. With the help of an FHA loan, you can have a credit score as low as 500. The government-backed loan program opens the door for more borrowers to achieve their goal of homeownership.
Typically, a credit score below 500 is considered bad. With bad credit, it can be difficult to close on a loan.
Higher scores and alternative mortgages
What is the best credit score to purchase a house?
Generally, a credit score of 700 or higher offers a borrower the best financing options. With a higher credit score, you can access lower mortgage rates. Depending on the details of your mortgage, a lower interest rate could lead to thousands of dollars in savings.
But it’s not necessary to wait until you have a great credit score. You can obtain a home loan through the FHA with a credit score as low as 500. If you dramatically improve your credit score in the future, refinancing is always an option.
Are there alternative types of mortgages for low-credit score borrowers?
The VA loan program, which is guaranteed by the U.S. Department of Veterans Affairs, offers zero down payment loans, competitive mortgage interest rates, and no private mortgage insurance (PMI) with relatively flexible credit requirements, which can be a good option for borrowers who are active-duty service members or veterans. For borrowers who live in rural areas, the USDA loan program, guaranteed by the U.S. Department of Agriculture, can be a good option, as long as your household income is within USDA’s limit for your area. The limit varies by county and household size, and it is generally around 115% of the area median income.
Check your FHA home buying eligibility here (Nov 10th, 2026)
