An FHA Loan is a smart solution to obtain financing to purchase a home. However, you need to have the right credit score to meet all the qualifications to be approved faster. This is because all FHA loans are issued by an approved lender and insured by the Federal Housing Administration (FHA).
These loans are designed for low-to-moderate-income borrowers, FHA loans require a lower minimum down payments and credit scores than many conventional loans.
FHA Loan Credit Score Needed To Qualify
To qualify for an FHA loan the borrower will need a median FICO® Score of at least 620. This means that the borrower’s middle score from the major three credit bureaus will need to be at least a 620 to qualify.
The middle credit score will be taken from Equifax®, Experian™, and TransUnion®
As of 2019, you can borrow up to 96.5% of the value of a home with an FHA loan (meaning you’ll need to make a down payment of only 3.5%).
Typically, a borrower can still qualify for an FHA loan with at least a 580 middle credit score. If the credit score falls between 500 and 579, the borrower can still get an FHA loan provided that the borrower is able to make a 10% down payment.
However, when it comes to making a down payment for an FHA loan down payment can come from savings, a financial gift from a family member or a grant for down-payment assistance.