Requirements

What are FHA loan requirements?

Short answer

FHA requirements stack across credit, down payment, income, DTI, assets, occupancy, property condition, loan limits, and mortgage insurance — and lender overlays often tighten FHA's published rules. The minimum credit floor for 3.5% down is 580 (500–579 may qualify with 10% down, though most lenders won't fund). Primary residence only. Property must pass FHA appraisal under HUD's minimum property standards.

Plain-English explanation

The FHA layer: credit score floor (580 for 3.5% down, 500-579 for 10% down per HUD, with most lenders requiring 580+ in practice), debt-to-income within FHA's published ceiling, primary-residence occupancy within ~60 days of closing, property meeting HUD minimum property standards via the FHA appraisal, loan amount within the county loan limit, and mortgage insurance (upfront and monthly MIP). The lender layer: documented income with stable two-year history, sourced and seasoned assets for cash to close, overlay-tightened DTI/credit caps, and any program-specific items. Lender overlays sit on top of FHA's rules and often tighten them. Subject to FHA/HUD guidelines.

Practical example

A Florida buyer with a 620 credit score, $10k saved for down payment on a $250k purchase (4% down), W-2 income with two years on the same job, 42% DTI, and a property that passes FHA appraisal — all FHA layers and lender overlays clear, the file moves to closing. Drop the credit to 560 or the DTI to 55% without compensating factors and the same file falters.