FHA Loan Requirements Explained
FHA loans are one of the most accessible paths to homeownership in the US. This guide explains every requirement in plain English: credit score, down payment, debt limits, property rules, and what disqualifies you.
Quick answer
FHA loans require as little as 3.5% down with a 580+ credit score, a debt-to-income ratio under ~43%, two years of steady employment, and the home must be your primary residence.
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration. The lender is still a private bank, but the FHA insures the loan against default — so lenders accept lower credit scores and down payments than they would for a conventional loan.
FHA loans are designed for first-time and lower-down-payment buyers. They're available to almost anyone who meets the requirements — no income limits, no first-time-buyer rule.
Credit score requirements
- 580+ credit score: 3.5% down payment allowed
- 500–579 credit score: 10% down payment required
- Below 500: not eligible for FHA
Many lenders set their own overlays at 620 or higher even for FHA loans. Shop around — minimums vary.
Down payment requirements
The big draw of FHA loans is the low down payment:
- 3.5% down with 580+ credit score
- Down payment can be a gift from family
- Down payment assistance programs are widely accepted
- Sellers can contribute up to 6% toward closing costs
Debt-to-income limits
- Front-end DTI (housing): typically up to 31%
- Back-end DTI (total debt): typically up to 43%
- Lenders may allow up to 50% DTI with strong compensating factors (cash reserves, large down payment, high credit score)
Mortgage insurance (MIP)
All FHA loans require mortgage insurance — both upfront and monthly:
- Upfront MIP: 1.75% of the loan, financed into the loan amount
- Annual MIP: 0.55% of the loan balance, paid monthly
- MIP lasts the life of the loan (with <10% down) — you'd need to refinance to remove it
Income and employment requirements
- Two years of stable employment, ideally with the same employer or in the same field
- Verifiable income (W-2s, tax returns, pay stubs)
- Self-employed: typically 2 years of tax returns
- No minimum income requirement
Property requirements
Not every home qualifies for an FHA loan:
- Must be your primary residence (no investment properties)
- 1–4 unit dwelling (single-family, duplex, triplex, fourplex)
- Must pass an FHA appraisal (no major safety/structural issues)
- Loan amount must be within county FHA limits ($498,257 in most counties for 2026)
What can disqualify you
- Recent bankruptcy: typically 2-year wait after Chapter 7, 1 year after Chapter 13
- Foreclosure: 3-year wait
- Federal student loan default or unpaid federal debt
- Falsified income or asset documentation
- DTI above 50% with no compensating factors
Use the calculator
See if you qualify for an FHA loan
Enter your income and down payment to see your FHA-eligible price range.
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Frequently Asked Questions
What credit score do I need for an FHA loan?
580 with 3.5% down, or 500–579 with 10% down. Many lenders require 620+ even for FHA.
How much down payment does FHA require?
3.5% with a 580+ credit score. The full down payment can be a gift from a family member.
What's the FHA loan limit?
$498,257 in most US counties for 2026. High-cost areas go up to about $1.15 million.
Can I use FHA for a second home?
No — FHA loans are only for primary residences. You must occupy the home within 60 days of closing and live there at least one year.
Does FHA have income limits?
No — there's no maximum income for an FHA loan. Anyone meeting the requirements can apply.
How long does mortgage insurance last on FHA?
With less than 10% down, MIP lasts the entire life of the loan. With 10%+ down, it drops off after 11 years. Most borrowers refinance to a conventional loan once they reach 20% equity.
Can I get an FHA loan after bankruptcy?
Yes — typically 2 years after Chapter 7 discharge, 1 year of on-time payments after Chapter 13. Some lenders require longer waits.