Loan Requirements

FHA Credit Score Guidelines 2026

FICO Scores

There are different FICO score versions for different verticals: credit card, auto, mortgage, luxury items, and high-ticket items, they all use different algorithms to calculate the borrower’s score. It is imperative that a borrower looking for a mortgage monitor know their “mortgage” FICO score and not their “credit card” FICO score before applying for a home loan.

The “mortgage specific” FICO scoring models are:

Equifax = FICO score 5
Experian = FICO score 2
TransUnion = FICO score 4

If you are seeing a FICO score model different from what is stated above, rest assured that it is NOT the mortgage FICO score that mortgage lenders use to qualify a borrower.

Knowing Your Middle FICO Score

After you find out your mortgage-specific FICO scores based on what was mentioned above, it is time to know where you stand. The three (3) different credit bureaus will give you 3 different scores. You must discard both the highest and lowest scores, respectively. What you are left with is your “middle FICO score“. That is the score that mortgage lenders use to qualify for a loan.

For example, if your Experian score is 600, Equifax is 620, and TransUnion is 640 after you discard both the highest score (640) and the lowest score (600), you are left with 620 — that is your “middle FICO” score.

FHA FICO Score Requirement

The Federal Housing Administration (FHA) only requires a 580 FICO score to qualify for the 3.5% minimum down payment requirement. However, borrowers with scores below 580 down to 500 are still eligible with a 10%down payment.

FHA Down Payment Requirement

There are two down payment requirements depending on the borrower’s credit score.

For the 3.5% down payment, a borrower must have a middle-FICO score of 580.
Borrowers with a FICO score of less than 580 and all the way down to 500 may still qualify for an FHA-insured loan, but they will need a minimum of 10% down payment, and certain restrictions may apply.

Minimum credit score for FHA loan

As mentioned above, an FHA has two credit score requirements: (a) 580 with 3.5 percent down and (b) 500 with 10 percent down. However, an FHA loan is not a sub-prime loan program. Although the FHA allows borrowers with a lower FICO to qualify for a home loan, it does not allow approvals to borrowers who have low scores due to their inability to manage and pay their creditors on time. There are several reasons why a borrower’s credit score is low without actually having “bad credit.” If your score isn’t there yet, our rent-to-own program offers a rent-now, earn-equity option while your credit recovers. Below are some factors affecting your scores:

Credit Utilization

– Credit utilization is the ratio of your credit card balances in relation to your credit limits. It is the measurement of the amount of the credit limit that is being used.

Recently Opened Accounts

– Recently opened accounts, especially too many recently opened accounts, can hurt your overall credit score. Since the accounts were just opened recently, the history on those new accounts is not long enough to provide sufficient payment history to demonstrate responsible behavior. Furthermore, having multiple open accounts that are relatively new is seen as a higher risk due to the possibility of becoming overextended, resulting in loan default.

Limited Credit History

– Limited credit history means that your credit file either has a few accounts listed, less than 5 accounts with no major account or the open accounts have only been opened for a short period of time, typically within 12 – 24 months history. In short, it means your credit profile is new. It is not a bad thing, it just means they are all recently opened, having not enough history, therefore will not get a high credit rating.

Previous Derogatory Accounts

– Derogatory account means that account is considered negative. Typically, a negative account indicates serious delinquency or late payments. If you have a derogatory item in your credit report, it can have a significant negative impact on your credit score.

For more information regarding credit score requirements, contact us at (281) 801-6965 or use any of the tools on this website.