Have a low credit score and feel like you might not be approved? If your credit score is over 500, we can help you!
FHA loans, which are backed by the Federal Housing Administration, are known for their more lenient credit score requirements compared to conventional mortgages. While FHA does not have a specific minimum credit score requirement, most lenders who offer FHA loans will have their own credit score requirements, typically in the range of 500 to 580 or higher. However, a credit score below 580 may require a larger down payment.
Here’s a general guideline for FHA loan credit score requirements:
- 580 or Higher: With a credit score of 580 or higher, you may be eligible for an FHA loan with a down payment as low as 3.5% of the home’s purchase price.
- 500-579: If your credit score falls between 500 and 579, you may still qualify for an FHA loan, but you’ll likely need to make a larger down payment, often around 10% of the home’s purchase price.
It’s important to note that while FHA loans have more relaxed credit score requirements, lenders may also consider other factors, such as your debt-to-income ratio and your overall financial history. If you have a low credit score, you may want to take steps to improve your credit before applying for an FHA loan. This could include paying down existing debts, disputing errors on your credit report, and establishing a history of on-time payments.
Keep in mind that lending requirements can change over time, so it’s a good idea to work with a mortgage professional when considering options.
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