Credit score The minimum credit score for an FHA loan is 500. If your score falls between 500 and 579, you can still qualify for an FHA loan, but you'll need to make a larger down payment.
Down payment funds If you've got a credit score of 580 or higher, your FHA down payment can be as low as 3.5%. A credit score between 500 and 579 means you must plunk down 10% of the purchase price.The good news? It doesn't all have to come from savings. You can use gift money for your FHA down payment, so long as the donor provides a letter with their contact information, their relationship to you, the amount of the gift, and a statement that no repayment is expected.
Debt-to-income ratio (DTI) The FHA requires a DTI of less than 50, meaning your total monthly debt payments can't exceed 50% of your pretax income. This includes debts that you aren't actively paying. For student loans in deferment, your FHA loan underwriter will include 1% of the loan's total as the monthly payment amount. For other types of loans you aren't currently repaying, underwriters will use 5% of the total to calculate your DTI.
FHA LOAN BENEFITS
LOW CREDIT SCORE
HELP IN AVOIDING FORECLOSURE
VARIOUS TERM LENGTHS
CLOSING COSTS
DOWN PAYMENTS AS LOW AS 3.5%
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