FHA Loan

FHA loan



FHA loan - We hear it all the time!

What's the minimum credit score for an FHA mortgage?

The answer is.

The minimum credit score for an FHA loan is 500.

FHA requires a minimum credit score 580 to qualify for their 3.5% down payment program. Borrowers with credit score below 580 are required to make a 10% down payment. 

Credit Score - FHA does not require a credit score to qualify for a loan. Borrowers with no credit score can qualify with 3.5% down payment.

FHA allows borrowers with a credit score and limited trade lines to qualify for an FHA loan.


Disputed Accounts - If the credit report reveals that the borrower is disputing any credit accounts or public records, the disputes must be resolved.

FHA will not allow you to close on a loan with disputed accounts unless the disputed account has a zero balance; is marked as "paid in full" or "resolved"; or has both a balance less than $500.00 and the date of the dispute is more than 24 months old.

Collection Accounts - FHA does not require you to pay off collection accounts. Medical collection accounts, auto repossessions, credit card collection account and any other collection account do not have to be paid off. The lender must calculate the monthly payment using 5% of the outstanding balance of each collection, and include the monthly payment in the borrower’s debt-to-income ratio.


Foreclosure - To be eligible for a FHA loan 3 years must have past from the date the bank sold the property.

Seasoning requirements is determined by the type of loan:

  • Conventional loan: the date of sale the lender sold the property
  • Government loan: the date the claim was paid

A borrower whose previous residence or other real property was foreclosed on or has given a deed-in-lieu of foreclosure within the previous three years is generally not eligible.

Short Sale - To be eligible for a FHA loan 3 years must have past from the date of sale. If your mortgage payments were in default at the time of the short sale FHA requires you to wait 3 years before you can qualify for a new loan.


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