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FHA Loan Requirements: Are You Qualified?

FHA Loan Requirements: Are You Qualified?

If you’re ready to buy a home, but your credit score isn’t up to par, or you don’t have enough money saved up for a down payment, the Federal Housing Administration (FHA) might be able to help. The FHA has low credit and down payment requirements—so if you’ve struggled with either of those things in the past, it may be time to consider an FHA loan.

In this article, we’ll explore how much income you need to qualify for an FHA loan, as well as other FHA loan requirements like your credit score and employment history.

FHA Minimum Credit Score: 500

Your credit score is the most important factor in qualifying for an FHA loan. If your score is too low, your lender will require you to pay a higher down payment and/or insurance premium. If your score is too high, you may not qualify at all because there’s a maximum FICO limit set by the Department of Housing and Urban Development (HUD).

The minimum required credit score for an FHA loan varies according to your particular situation:

If you’re buying a home with someone else who’s going to be on the mortgage with you (your spouse, partner, or friend), either one of you can meet this requirement as long as they have a good enough credit history to qualify for their own mortgage too.

FHA Minimum Down Payment: 3.5%

To be eligible for an FHA loan, you’ll need to make a down payment of at least 3.5% of the purchase price. This is a great way to get into a home if you’re looking for an easier loan process than conventional loans offer. While it’s true that many conventional mortgages require as little as 5% down, they also tend to have higher interest rates and more strict requirements. On top of that, some borrowers may not qualify for conventional loans at all because their credit scores aren’t high enough or they don’t have enough money saved up in their savings account (the minimum is usually 20%).

FHA Debt-To-Income Ratio: 57% Or Less

What is it? The FHA debt-to-income ratio is the amount of money you spend on your monthly debt divided by your monthly income. For example, if you earn $2,000/mo in pre tax income and you pay $940 a month in mortgage payments and have another $200 in credit card bills, your DTI would be 0.57 — $1,140 divided by $2,000 equals 0.57:1.

Why does it matter? The FHA requires that homebuyers keep their overall DTI below 57%, which means they should spend no more than 57% of their pretax income on housing payments (including principal and interest) along with any other payments on your credit report. FHA also requires that the overall “housing” portion (principal, interest, taxes, insurance and association dues if applicable) of your Debt-To-Income ratio not exceed 47%. For example, if you earn $2000/mo pretax income then the total housing payment cannot exceed $940/mo. This means that you can afford to purchase a home with an FHA loan so long as all other requirements are met.

FHA Loan Income Requirements

FHA documentation requirements can seem daunting to first-time homebuyers, but they’re actually not that difficult to navigate. With a little bit of planning and organization, you can get through the process with relative ease.

Here are a few tips to keep in mind when gathering your documentation:

• Make sure you have all of the required documents before starting the application process. The last thing you want is to delay your loan because you’re missing a key piece of paperwork.

• Stay organized throughout the process. Keep track of what documents you’ve submitted and what still needs to be sent in. This will help you avoid any unnecessary delays.

• If you’re unsure about anything, don’t hesitate to ask for help from your mortgage banker at Quillo. They’ll be able to guide you through the process and answer any questions you have.

• Downloading the mobile app makes uploading documents much simpler if you’re comfortable with mobile tech.


FHA loans have strict requirements but can be easier on buyers who have less than perfect credit. If your income is below the median income for your area and/or your debt-to-income ratio is high, this type of financing may be available to you as an alternative option.

Let us guide you home.