To qualify for an FHA loan, you need a credit score of at least 500, a steady income, a manageable level of debt, and enough savings for a down payment as low as 3.5%. FHA loans are backed by the Federal Housing Administration, which means lenders take on less risk and can approve borrowers who might not qualify for a conventional mortgage. Here’s what you need to meet each requirement.
Credit Score and Down Payment
Your credit score determines how much you need to put down. With a score of 580 or higher, you qualify for the minimum down payment of 3.5% of the purchase price. On a $300,000 home, that’s $10,500. If your score falls between 500 and 579, you’ll need to put down 10%, which on that same home would be $30,000. Below 500, you won’t qualify at all.
These are the FHA’s minimums, but individual lenders often set their own floors higher. Many FHA lenders require a 580 or even a 620 credit score as a practical matter. If your score is on the lower end, it’s worth shopping around, since requirements vary from one lender to the next.
Your down payment can come from savings, a gift from a family member, or a down payment assistance program. FHA rules are more flexible than conventional loans on this point. You don’t have to fund the entire down payment from your own bank account, but you do need to document the source of every dollar.
Income and Employment
FHA loans don’t have a minimum or maximum income requirement. What lenders care about is that your income is steady and verifiable. You’ll typically need at least two years of consistent employment history. That doesn’t mean you have to stay at the same job for two years. Changing employers is fine, especially if you’re staying in the same field or moving to a higher-paying role.
If you’re self-employed, expect to provide two years of federal tax returns, including all schedules. Lenders will average your net income (not gross revenue) over those two years. Large fluctuations or declining income can raise flags, so be ready to explain any dips.
For W-2 employees, lenders will ask for your two most recent pay stubs, W-2 forms from the past two years, and possibly bank statements showing regular deposits. If you have other income sources like Social Security, child support, or rental income, those can count too, as long as you can document that they’ll continue for at least three years.
Debt-to-Income Ratio
Your debt-to-income ratio (DTI) measures how much of your gross monthly income goes toward debt payments. To calculate it, add up all your monthly obligations: the proposed mortgage payment (including taxes and insurance), car loans, student loans, minimum credit card payments, and any other recurring debt. Divide that total by your gross monthly income.
FHA guidelines generally allow a DTI of up to 43%, though some lenders will go as high as 50% if you have strong compensating factors like a larger down payment, significant cash reserves, or a higher credit score. For example, if you earn $6,000 per month before taxes, a 43% DTI means your total monthly debts (including the new mortgage) can’t exceed about $2,580.
If your DTI is too high, you have a few options: pay down existing debts before applying, look at a less expensive home, or increase your income. Even paying off a car loan or a credit card balance can make the difference.
Loan Limits
FHA loans have a cap on how much you can borrow, and it varies by location. In most of the country, the 2026 limit for a single-family home is $832,750. In high-cost areas where home prices run significantly above the national median, the ceiling goes up to $1,249,125. You can look up the specific limit for your county on HUD’s website.
If the home you want exceeds the FHA limit for your area, you’ll need to either make a larger down payment to bring the loan amount under the cap or explore conventional loan options instead.
Property Requirements
The FHA doesn’t just evaluate you. It evaluates the home, too. Every property financed with an FHA loan must pass an FHA appraisal, which goes beyond estimating the home’s market value. The appraiser checks that the home meets HUD’s minimum health and safety standards.
The home must be free of hazards that could affect the occupants’ health or the building’s structural integrity. That includes things like toxic materials, water damage, foundation problems, faulty roofing, and inadequate drainage. Every living unit needs working hot water, a safe and sufficient supply of drinking water, functioning sanitary facilities, and a proper sewage system. The heating system must keep the home at a livable temperature, and if the home uses a wood stove or solar system as its primary heat source, it also needs a conventional backup system capable of maintaining at least 50 degrees in areas with plumbing.
For homes built before 1978, the appraiser will inspect all interior and exterior surfaces for chipping, flaking, or peeling paint, since older paint may contain lead. Crawl spaces must be clear of debris, properly ventilated, and free of standing water. The property also needs safe pedestrian and vehicle access from a public or private road, with all-weather access for emergencies.
If the appraisal turns up problems, the seller usually needs to make repairs before the loan can close. In some cases, you can negotiate who pays for the fixes, but the work has to be completed and verified before FHA will insure the mortgage.
Mortgage Insurance Costs
Every FHA loan comes with mortgage insurance, which protects the lender if you default. There are two parts to this cost, and both are unavoidable.
The first is an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, charged at closing. On a $300,000 loan, that’s $5,250. Most borrowers roll this into the loan balance rather than paying it out of pocket, which means you’d actually be financing $305,250.
The second is an annual mortgage insurance premium (MIP), which you pay monthly as part of your mortgage payment. The rate depends on your loan size, term, and how much you put down. For a typical 30-year loan of $726,200 or less:
- Down payment of 10% or more (LTV 90% or less): 0.50% annually, and it drops off after 11 years
- Down payment between 5% and 10% (LTV above 90%, up to 95%): 0.50% annually for the life of the loan
- Down payment less than 5% (LTV above 95%): 0.55% annually for the life of the loan
On a $290,000 loan, an annual MIP rate of 0.55% adds about $133 per month to your payment. For borrowers putting down the minimum 3.5%, this cost stays for the entire loan term. The only way to eliminate it is to refinance into a conventional loan once you have enough equity, typically 20%.
How to Apply
Start by checking your credit report for errors and getting a general sense of your score. You can pull free reports from all three bureaus through AnnualCreditReport.com. If your score needs work, even a few months of on-time payments and paying down credit card balances can make a meaningful difference.
Next, get pre-approved through an FHA-approved lender. Not every mortgage company offers FHA loans, so confirm before you apply. During pre-approval, the lender will verify your income, pull your credit, and give you a letter stating how much you’re approved to borrow. This letter strengthens your position when making an offer on a home.
Gather your documents ahead of time to speed things up. You’ll typically need two years of tax returns, recent pay stubs, W-2s or 1099s, two to three months of bank statements, and a valid government ID. If you’re receiving gift funds for your down payment, the donor will need to provide a signed gift letter confirming the money doesn’t need to be repaid.
Once you’re under contract on a home, the lender will order the FHA appraisal. If the home passes and your financial profile checks out during underwriting, you’ll move toward closing. The whole process from application to closing typically takes 30 to 45 days, though it can stretch longer if the appraisal flags repairs or if additional documentation is needed.