If your credit score is below 620 or you have a high DTI ratio, an FHA loan may be your best option. Conventional loan requirements set a minimum 620 credit score, which is significantly higher than the 500 minimum score for FHA loans.
Our FHA loan calculator provides a quick and easy way to estimate your monthly FHA mortgage payment. Just plug in the following seven pieces of information:
Lender | LendingTree rating | Min. credit score (FHA loans) | Min. down payment (FHA loans) | Lender review |
---|---|---|---|---|
Overall FHA lender | 600 | 3.5% | ||
FHA loans with bad credit | 500 | 3.5% | ||
Online experience | 580 | 3.5% | ||
Online mortgage rates | 580 | 3.5% |
Follow the five steps below to get an FHA loan:
If your credit score is below 620 or you have a high DTI ratio, an FHA loan may be your best option. Conventional loan requirements set a minimum 620 credit score, which is significantly higher than the 500 minimum score for FHA loans.
The 2023 limit is $472,030 for single-family homes in most parts of the country, but may be as high as $1,089,300 for single-family homes in higher-priced areas.
The mortgage process for an FHA loan is similar to any other type of mortgage loan. You’ll fill out an application and provide financial documents like pay stubs, a W-2 and bank statements. One you find a home, the lender orders an FHA appraisal. If the appraisal supports your sales price, the lender issues a closing disclosure three business days before your closing. Once you review the figures, you can sign your final paperwork, get your loan funds and own your new home.
Yes, but you’ll still have to pay both types of mortgage insurance. However, the MIP will automatically drop off after 11 years.
You can ask for a gift or closing cost assistance if you’re short on funds. FHA guidelines allow the home seller to pay up to 6% of your loan amount toward closing costs. You can also ask the lender for a no-cost loan — the lender pays the costs on your behalf and increases your interest rate instead.
No. Anyone who meets FHA loan requirements can qualify for an FHA loan through an FHA-approved lender.
The minimum down payment is 3.5% for an FHA mortgage with a 580 credit score.
No, the FHA doesn’t set income restrictions. However, if you’re applying for down payment assistance (DPA), income limits may apply.