FHA Minimum Required Credit Score 2025

• Low interest rates
• Gift for down payment
• No credit score allowed
• 500 minimum credit score
• Non occupying co-borrower
• Seller paid closing cost up to 6%
• 3.5% down with 580 credit score

FHA Minimum Required Credit Score 2025

First of all FHA loans have been helping people become homeowners since 1934. Therefore a perfect credit score is not needed for an FHA loan approval. In fact, even if you have had credit problems, such as a bankruptcy, it’s easier for you to get an FHA loan than a conventional loan.

As a result FHA announced a set of policy changes to strengthen the FHA. The changes announced are the latest in a series of changes enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.

Furthermore FHA requires a minimum credit score of 500. There are no income limits like you may find with first time home buyer programs. However, there are limits on how much you can borrow.

• 203(b) FHA purchase program provides mortgages for home buyers  to purchase a principal residence with a low down payment and with lower credit standards.
• 203(k) FHA purchase program is for the rehabilitation and repair of single family properties. Providing both the financing to purchase a property and the financing to make repair. The program offers an important tool for expanding home ownership opportunities.
• HUD $100 down payment program for borrowers purchasing single-family HUD Real Estate Owned (REO). The program is limited to owner-occupant buyers who have not purchased a HUD REO property within the last 24 months.
• Lease with option to buy mortgage. Lease with option to buy allows a renter to buy the property they are renting. A lease option mortgage allows for sellers credit.
• Gift of equity mortgage loan. A gift of equity is a transfer of ownership of a property to a family member or someone. Gift of equity down payment and gift funds requirements.

FHA Minimum Required Credit Score 2025

Consequently on January 20, 2010 FHA announced a new policy to address risk. As a result FHA changed the minimum credit score for new borrowers.

• FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment
• Borrowers with less than a 580 credit score will be required to put down at least 10%
• As a result minimum 500 credit score

Finally this has allowed the FHA to better balance its risk and continue to provide financing for home buyers.