FHA Loan Requirements in 2025

FHA Loan Requirements in 2025

• FICO score at least 580 = 3.5% down payment.
• FICO score between 500 and 579 = 10%.
• MIP (Mortgage Insurance Premium) is required.
• Debt-to-Income Ratio < 43%.
• The home must be the borrower’s primary residence.
• Borrower must have steady income and proof of employment.

The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by FHA-approved lenders.

FHA insures loans on single family and multi-family homes in the United States and its territories.

It is the largest insurer of residential mortgages in the world, insuring tens of millions of properties since 1934 when it was created.

FHA Loan Requirements in 2025

An FHA loan is a mortgage that’s insured by the Federal Housing Administration. They allow borrowers to finance homes with down payments as low as 3.5% and are especially popular with first-time homebuyers.

FHA loans are a good option for first-time homebuyers who may not have saved enough for a large down payment. Even borrowers who have suffered from bankruptcy or foreclosure may qualify for a FHA-backed mortgage.

FHA loan applicants must have a minimum FICO score of 500 to qualify for the low down payment advantage which is currently 3.5%.

If your credit score is …

• Below 580: You will need to put down 10% of the loan amount.
  • For example, for a loan amount of $500,000 with a credit score of 570, the down payment is 10% or $50,000.
• Above 580: You will put down a minimum of 3.5%.
  • For example, for a loan amount of $100,000 with a credit score of 590, the down payment is 3.5% or $3,500.

Your FICO score is reviewed by lenders and is used to determine how likely you are to make timely payments on your mortgage. The higher the score, the better your chances are of getting a lower interest rate on your mortgage.

FHA Loan FAQs

Still looking to learn more about FHA loans? Here are the answers to a few of the most frequently asked questions.

Is an FHA loan right for me?

An FHA loan might be the right loan option for you if you’re having trouble getting a loan due to your financial history or if you’re a first-time home buyer. However, it’s always important to weigh the pros and cons of any loan option before you fully commit to one. Make sure you’re aware of all other associated with FHA loans and that you’re financially prepared to pay them.

How do I apply for an FHA loan?

Mortgage-World.com offers FHA loans. Once you provide all of the necessary personal and financial documents (tax returns, pay stubs, banks statements, etc.) we will submit your application and work on a loan estimate.

Who qualifies for an FHA loan?

As with every loan, there are certain requirements borrowers must meet to qualify for an FHA loan. Borrowers must prove that they have a steady employment history by showing pay stubs, W-2s. federal tax returns and bank statements.  Borrowers also need to follow these requirements as well:

• The home must be appraised by an FHA-approved appraiser.
• The home has to be a primary residence.
• You must occupy the property within 60 days of closing.
• An FHA inspection is required, and the inspection must report whether the property meets minimum property standards.

There are also a few more specific conditions to qualify, including a down payment amount, mortgage insurance, credit score, loan limits and income requirements.

The Bottom Line

If you’re in the market for a loan with lenient credit, lower down payment and low-to-moderate income requirements, an FHA loan might be right for you. If you’re ready to begin your home buying journey, start your initial mortgage approval online today with Mortgage-World.com.

Written by: Julia Luis, Loan Officer for Mortgage-World.com, LLC

Julia Luis covers mortgages and the housing market. Before joining Mortgage-World.com, she was a college student at the University of Miami.