Who Qualifies for an FHA Home Loan?

By
Mortgage and Lending with ChangeMyRate.com® A Mortgage Corporation NMLS #1326269

A mortgage the Federal Housing Administration backs is known as an FHA loan. FHA loans are unique from other mortgages and home loans. They’re often helpful for first-time homeowners because they offer a combination of a lower down payment requirement and lower credit score standards.

The following are some of the critical factors when it comes to qualifying for an FHA loan.

Credit Score Requirements

The minimum credit score for an FHA loan approval is 500. That’s lower and often significantly lower than lender requirements for traditional mortgages. The lower credit score requirements are a big reason this is an appealing program for first-time buyers.

While the FHA has guidelines for credit score minimums, that doesn’t automatically mean a lender won’t have higher requirements. FHA loans aren’t from the government directly.

Instead, they’re insured by the FHA on behalf of the lender.

Even though lenders’ risk is minimized because they have that backup, they may reduce their risk by having higher credit minimums. Just as you would with any other type of mortgage, it’s still important to shop around and compare FHA lenders to make sure you’re getting the best terms.

To learn more about FHA Home Loan and the home buying process, visit the SCOOP! Blog

Comments (2)

CANDACE (Candy) STEVENS, EA
Number Cruncher LLC - Overton, NV
Helping Taxpayers Resolve IRS problems

Great information Jackie A. Graves.  All the different kind of loans out there for purchasing a home are confusing to me!

Oct 19, 2021 03:36 PM
Jackie A. Graves

Hi Candace, thank you for your comment. Stay posted for future blogs and make it a great day. 😊

Oct 26, 2021 02:13 PM
Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

I agree Jackie you make some great points on FHA loans. In reality on the credit score portion.... I have never had  a 500 hundred credit score client approved. Even higher 500s are difficult. It seems with that score they often have other past due situations (past due, collection agencies, work oult plans) that get in the way.

Oct 19, 2021 10:44 PM
Jackie A. Graves

Hi Jeff, thank you for your comment. Stay posted for future blogs and make it a great day. 😊

Oct 26, 2021 02:14 PM