Think Your Credit Score Is Too Low to Buy a Home? Think Again.
Thinking about buying a home but worried your credit score might hold you back? Good news: FHA loans were designed to make homeownership more accessible, especially for folks who don’t have perfect credit. Backed by the Federal Housing Administration, these loans offer flexible requirements that can open doors for buyers with lower scores—or even no score at all.
Let’s break down what credit score you need, how it impacts your options, and a few tips to help you qualify for the best terms.
FHA Loan Credit Score Basics
Here’s the scoop:
540–579: You can still qualify! You’ll just need a 10% down payment and keep your debt-to-income ratio around 43% or lower.
580+: This is where things get exciting—you can snag the standard FHA down payment of just 3.5%. That’s one of the biggest perks of this program.
Special Programs for Extra Help
We also offer programs that pair with FHA loans to make things even easier:
Down Payment Assistance: Options like Zero Down combine an FHA mortgage with a second mortgage to cover your down payment and closing costs.* These typically require a credit score of 600 or higher.
No Credit Score? No Problem: Our Complete Rate program helps first-time buyers without a credit score qualify using bank statements and proof of regular payments like rent and utilities. Depending on the loan type, your down payment could be as low as 0–3.5%.
Why Your Credit Score Matters
Your score affects a few key things:
Down Payment
540–579: 10% minimum
580+: 3.5%
Interest Rates
FHA rates are often lower than conventional, but higher scores can still mean better terms.
Mortgage Insurance Premium (MIP)
All FHA loans require MIP, but stronger credit can help reduce overall costs.
Other FHA Requirements
Credit score isn’t the only factor. Lenders also look at:
Steady employment (usually two years)
Income stability
Debt-to-income ratio (generally below 43%)
Property appraisal that meets FHA standards
Tips to Boost Your Credit Score
Want to improve your chances? Try these:
Pay bills on time
Pay down existing debt
Avoid opening new credit lines
Check your credit report for errors
Become an authorized user on someone’s good credit account
Bottom Line
FHA loans are one of the most accessible options for buyers with less-than-perfect credit. With scores starting at 540, and even options for those without a score, this program can be a game-changer. Take time to understand your credit situation and explore ways to strengthen it—you’ll thank yourself later when you lock in better terms.
*Income limits apply. No minimum contribution required from the borrower when DPA second mortgage is combined with FHA first mortgage. Zero Down is not affiliated with HUD.
Educational purposes only. Programs and rates subject to change. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for tax-related questions.