Ask a few lenders about FHA’s down payment and you’ll likely hear the same answer: 3.5%. That number only applies once your credit score clears a specific line HUD sets, and it changes twice more below that line.
The 580 line
HUD’s minimum decision credit score standard puts the line at 580. At or above it, a borrower is eligible for what HUD calls maximum financing. For a purchase, that caps the loan at 96.5% of the home’s value, which works out to a 3.5% minimum down payment.
Between 500 and 579
Score in that range, and HUD limits the loan to 90% of the home’s value instead, a 10% down payment. The loan is still FHA-insured. It just costs more upfront.
Below 500
HUD’s rule here is direct. A borrower with a credit score below 500 isn’t eligible for FHA-insured financing.
No credit score at all
No traditional credit file? HUD still puts you in the 3.5% tier. You just get underwritten manually instead of by score.
Where this leaves you
Pull your credit report before you start shopping lenders if you don’t already know your score, so you know your tier going in. I’m Diana Kim, REALTOR with eXp Realty, working with buyers across Greater Boston in English and Korean. Send me your number and I’ll tell you what it means for your down payment.
Questions
Common questions
What credit score do I need for FHA's 3.5% down payment?
A minimum decision credit score of 580 or higher. At that score, HUD's guidance makes you eligible for maximum financing, which caps an FHA purchase loan at 96.5% of the home's value, a 3.5% down payment.
What down payment does FHA require below a 580 credit score?
Between 500 and 579, HUD limits the loan to 90% of the home's value, a 10% down payment. Below 500, the loan isn't eligible for FHA-insured financing.
Can I get an FHA loan with no credit score?
Yes. HUD treats a thin credit file differently than a low score. Borrowers with no traditional or insufficient credit history can still qualify for the 3.5% minimum, underwritten by hand instead of by score.
Written by Diana Yeji Kim — REALTOR® at eXp Realty, serving Greater Boston in English, Korean, and Japanese.
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