FHA Loan Credit Requirements
FHA Loan Requirements
Conventional loan requirements made it difficult for many, particularly first-time homebuyers, to qualify for a mortgage loan. FHA loans make it possible for those with credit scores in the 500’s to achieve the dream of homeownership. For this reason, FHA loans are the most popular government-backed loans available.
Credit and Down Payment Requirements
Potential borrowers with a credit score of 580 and above can qualify for a mortgage with as little as 3.5% down. If your credit score is below 580 approval is still possible with a 10% down-payment.
Other Benefits of an FHA Loan
FHA loans have been helping homeowners since 1934 and may be the perfect choice for you! The relaxed credit requirements and low down-payments make buying home considerably more accessible for those who do fit the typical homebuyer profile.
- Competitive Interest Rates – FHA loans offer low interest rates so that borrowers can afford the monthly payment.
- Lower Fees – Closing costs, mortgage insurance and other fees are lower on FHA loans.
- Bankruptcies and Foreclosures – Potential homeowners are not strictly disqualified because of prior bankruptcy or a foreclosure.
- No Credit – There are FHA loan options available for those with no credit or insufficient credit.