FHA Eligibility Guide

FHA Loan With a 500–580 Credit Score:Can You Qualify?

A lower credit score doesn't automatically close the door on homeownership. FHA loans allow scores as low as 500 with a larger down payment. Here's exactly how it works in 2026.

Saman Khanian - Chief Executive Officer at Equitable Lending

Saman Khanian

Author & Mortgage Professional

Updated October 2026
8 min read
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First-time homebuyer reviewing FHA loan options

500

Minimum FHA score

10% down required below 580

Homebuyer reviewing credit score and FHA loan requirements
The Short Answer

Yes — the Question Is Which Down Payment You'll Need

The FHA allows credit scores as low as 500. But the lenders who actually fund FHA loans can set their own "overlays" on top of that floor, and many require a higher score. The practical rule of thumb: 580+ means 3.5% down, while a score between 500 and 579 means 10% down and a lender willing to go that low.

500

FHA minimum credit score

10%

Down payment below 580

580+

Score for just 3.5% down

In This Guide

The Short AnswerFHA Credit Score MinimumsDown Payment by Credit ScoreCompensating FactorsHow to Improve Your OddsFrequently Asked Questions
The Numbers

FHA Credit Score Minimums

The FHA sets the floor; your lender sets the bar. Here's how the score bands and down payments line up.

Credit ScoreMinimum Down PaymentNotes
500–57910% minimum down paymentSubject to lender overlays
580+3.5% minimum down paymentThe most widely available path
620+3.5% down, better pricingMore lenders compete for your file
640+Best FHA termsStrongest approval odds and lowest rates

Important: the FHA's 500 score floor is a guideline, not a guarantee. Many large lenders set their own minimum at 580, 600, or 620 — which is why a specialist who works with a range of FHA lenders matters so much at lower scores.

Down Payment by Credit Score

The 3.5% versus 10% difference is the single biggest swing in the program. Here's what it looks like on real purchase prices.

Purchase PriceScenarioCash Down
$300,0003.5% down (580+)$10,500
$300,00010% down (500–579)$30,000
$500,0003.5% down (580+)$17,500
$500,00010% down (500–579)$50,000
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Strengthen the File

Compensating Factors

A low score isn't judged in isolation. Lenders weigh the whole picture — and these factors can carry real weight.

More Money Down

A larger down payment — including the 10% required below 580 — signals lower risk and strengthens the file considerably.

Low Debt-to-Income

A DTI at or below the FHA guideline (generally 43%, often up to 50% with strong compensating factors) offsets a weaker score.

Clean Rental History

Twelve months of on-time rent, paid by check or transfer, can demonstrate creditworthiness when traditional credit is thin.

Cash Reserves

Months of mortgage payments left in the bank after closing shows the lender you can absorb a surprise without defaulting.

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Action Steps

How to Improve Your Odds

A modest score bump can move you from 10% down to 3.5% — or unlock lenders that won't touch a 500. These moves are worth making first.

Borrower reviewing a plan to improve credit score before applying

A few points can change your entire loan.

  • Pay down revolving balances to lower your utilization below 30%
  • Avoid opening new credit accounts or auto loans before applying
  • Dispute any errors on your credit report in writing
  • Bring any past-due accounts current and keep them there
  • Consider a rapid rescore through your loan officer once issues are fixed
Learn more about FHA & VA loans
Answers

Frequently Asked Questions

Common questions about FHA loans and low credit scores in 2026.

Can I get an FHA loan with a 500 credit score?
The FHA itself allows scores as low as 500, but individual lenders set their own minimums on top of that — many require 580 or higher. So a 500 score is technically eligible, but you'll need a lender willing to go that low, plus a 10% down payment.
How much do I need to put down with a 500-580 score?
A score between 500 and 579 requires a minimum 10% down payment under FHA guidelines. Once you reach 580, the minimum drops to 3.5%. On a $300,000 home, that's the difference between $30,000 and $10,500 down.
What credit score do I need for 3.5% down?
You need a 580 credit score to use the 3.5% minimum down payment. At 579 or below, FHA rules require 10% down. Lenders may still impose a higher minimum score than the FHA requires.
Why do some lenders require higher scores than the FHA?
Lenders add their own requirements — called overlays — on top of FHA guidelines to manage risk. A large bank might set a 620 minimum while a specialist lender goes down to 580 or the FHA floor. That's why working with a lender who offers a range of FHA programs matters at lower scores.
Can I still qualify with a recent bankruptcy or foreclosure?
Often, yes. FHA guidelines generally require a waiting period — commonly two years after a Chapter 7 bankruptcy discharge or three years after a foreclosure — plus re-established credit. A specialist can review your specific timeline and documentation.
What debt-to-income ratio does FHA allow?
FHA generally looks for a DTI at or below 43%, but it can go as high as 50% when strong compensating factors are present, like larger cash reserves or a lower payment history. Lower DTI always improves your odds.
Will I get a worse interest rate with a low credit score?
Yes, typically. A lower score means higher pricing and mortgage insurance costs, so your rate will be higher than a borrower with strong credit. Building your score before you apply — even by a modest amount — can meaningfully improve the terms you're offered.
Saman Khanian - Chief Executive Officer at Equitable Lending
About the Author

Saman Khanian

Saman Khanian is a mortgage professional and the CEO of Equitable Lending, where he helps first-time buyers and credit-challenged borrowers find a path to homeownership through FHA and alternative programs. He writes about FHA guidelines, credit repair strategy, Non-QM lending, and mortgage options for borrowers other lenders turn away.

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Disclosure: This article is for informational purposes only and does not constitute a loan commitment, rate quote, or financial advice. Down payment figures are illustrative examples only. FHA and other mortgage guidelines, rates, fees, and eligibility vary by lender, borrower, property, and state, and FHA loan limits vary by county. All loans are subject to credit approval and underwriting. Equitable Lending is a licensed mortgage lender — see our Licensing Information page. Contact a licensed loan officer to discuss your specific scenario.

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