Credit Score Guidelines

FHA Loan Advantages:

FHA Loan Requirements & Benefits

580+ FICO score requirement for borrowers with a 3.5% down payment

500-579 FICO score requirement with a 10% down payment

Down payment can be a gift from a family member.

You are allowed a non–occupant co-signer on the loan

Higher debt-to-income ratios allowed than any other loan programs (56.9% in some cases)

Must to prove income via 30 days’ paycheck stubs & last two years W2’s

Must have two years of documented employment history. College can count for this requirement, if needed.

More flexibility if you have filed bankruptcy or have a previous foreclosure in your past.

You are required to occupy the home as a primary residence. FHA does not allow investment homes.

Your mortgage payment includes all property taxes & insurance.

FHA loans offer several different terms of Fixed-rate or Adjustable-rate mortgage loans

FHA Down payment options& Credit Score Requirements

Down Payment Gifts

One of the strongest benefits of an FHA loan is that borrowers can obtain the down payment as a gift.

2020 FHA Loan Limits

FHA loan limits are determined by the county where the home is located, except for properties that are located in metropolitan statistical areas. In metro areas, the limits are set using “the county with the highest median home price within the metropolitan statistical area,” according to HUD.

That’s the geographical aspect of it. The maximum lending amounts for this program are also based on a percentage of conforming loan limits. For instance, FHA’s minimum national loan limit “floor” for low-cost areas is typically set at 65% of the national conforming amount for the U.S.

Here is what you need to know about the limits. The 2019 FHA limits vary from one county to the next.

Here are a few examples of borrower needs for an FHA loan.

The FHA’s national low-cost area mortgage limits for 2019 are set at 65% of the national conforming limit of $484,350 (for a one-unit property). Here are the 2019 amounts for this category, by property type:

High-Cost Areas

The FHA’s loan limits for high-cost areas are set at 150% of the national conforming cap of $484,350.

The loan amounts in your area may vary from the national limits. Please double check you area on HUD’S website link for loan limits:

Who should get an FHA Mortgage?

FHA Loans are great for anyone that’s looking to purchase or refinance a home that needs the flexible requirements and guidelines of an FHA loan.

Here are a few examples of borrower needs for an FHA loan.

FHA Loan

FHA Allowable Property types

Some commonly asked questions about FHA

Who qualifies for an FHA loan?

FHA loans offer some added benefit because they are one of the easiest types of home loans to qualify for. If you have a credit score of 500-579 you may qualify with 10% down. If you have at least a 580 credit score the required down payment is 3.5%.

How long does it take to close on a house with an FHA loan?

The time to close depends on several factors. You can increase the process by getting all of your documents to your loan officer as quickly as possible and responding to any requests in a timely manner.

Are FHA loans only for first-time homebuyers?

No. Anyone can qualify for an FHA mortgage regardless if they’re a first-time buyer, or not. You can be eligible under certain circumstances to purchase a home utilizing a second FHA. An Alliance member can help answer any questions regarding a second FHA mortgage.

At the end of the day

An FHA loan is a great option for many home buyers. FHA loans are easier to qualify and they offer lower interest rates.


FHA loans make homeownership a priority for folks that need their help for whatever reason.

**DISCLAIMER: All policy information contained in this knowledge base article is based upon the referenced HUD policy document. The Dept. of HUD occasionally makes changes to the FHA loan program, so the information given potentially could be out of date. For current up to date information on the FHA loan program, we encourage you to either contact HUD.Gov directly or ask an Alliance member for further information.