The main requirements FHA lenders look at

FHA loans have lower barriers than conventional mortgages, but you still need to meet several concrete requirements. Lenders will check your credit score, your debt-to-income ratio, your down payment amount, and your employment history. You'll also need to be a U.S. citizen or permanent resident, be at least 18 years old, and intend to live in the home as your primary residence.

The FHA itself doesn't lend money — it insures loans made by banks and mortgage companies. This insurance protects the lender if you stop paying, which is why FHA loans exist in the first place: they let people with lower credit scores or smaller down payments borrow money that traditional lenders wouldn't otherwise touch. But the lender still has to believe you can repay.

Key Takeaways

  • FHA loans typically require a credit score of 580 or higher, though some lenders accept scores as low as 500 with a larger down payment.
  • Your debt-to-income ratio — the percentage of your monthly income that goes to debt payments — usually cannot exceed 43 percent, though some lenders allow up to 50 percent.
  • You need a down payment of at least 3.5 percent of the home's purchase price, which is lower than the 5 to 20 percent conventional lenders typically require.
  • You must have a valid Social Security number, be a U.S. citizen or permanent resident, and plan to live in the home as your main residence.
  • Your employment history matters: lenders want to see stable income for at least two years, though gaps are sometimes acceptable if you can explain them.

Credit score and payment history

Most FHA lenders want a credit score of 580 or higher. If your score is between 500 and 579, some lenders will still work with you, but you'll typically need to put down 10 percent instead of 3.5 percent. Your credit score comes from your history of paying bills on time, the amount of debt you're carrying, and how long you've had credit accounts open.

Lenders also look at your actual payment history, not just the number. A single missed payment from years ago is less damaging than recent missed payments. If you've had a bankruptcy or foreclosure, you can still get an FHA loan, but you'll usually need to wait a certain amount of time — typically two years after a foreclosure and one to two years after a bankruptcy discharge, depending on the circumstances and the lender.

Debt-to-income ratio and monthly obligations

Your debt-to-income ratio is the total of all your monthly debt payments divided by your gross monthly income. FHA lenders typically want this number to be 43 percent or lower. That means if you earn $5,000 a month before taxes, your total monthly debt payments — including the new mortgage payment, car loans, student loans, credit cards, and child support — should not exceed about $2,150.

Some lenders will go as high as 50 percent if you have other compensating factors, like a larger down payment, a higher credit score, or significant savings. The new mortgage payment itself is calculated using the loan amount, interest rate, property taxes, homeowners insurance, and FHA mortgage insurance, which is a required cost for all FHA loans.

Down payment and savings

FHA loans require a minimum down payment of 3.5 percent of the purchase price. On a $200,000 home, that's $7,000. You don't have to save this money yourself — it can come from a gift from a family member, a grant, or a down payment information program in your state or city. However, you do need to document where the money came from.

Lenders also want to see that you have some savings left after closing. This shows you can handle an emergency without when ready defaulting on the loan. The amount varies by lender, but many want to see at least one or two months of mortgage payments in reserve. If you're using a gift for the down payment and have little savings of your own, mention this upfront — some lenders are more flexible than others.

Employment history and income verification

Lenders want to see at least two years of stable employment history. This doesn't mean you have to work for the same employer for two years — changing jobs is fine as long as you stayed employed. If you were laid off, went back to school, or had a gap, you'll need to explain it in writing. A letter from your employer, a school transcript, or documentation of unemployment benefits can help.

Your income itself needs to be documented. For W-2 employees, lenders ask for recent pay stubs and tax returns. If you're self-employed, you'll need two years of tax returns and possibly a profit-and-loss statement. If you receive alimony, child support, or Social Security, that counts as income too — bring documentation. Lenders want to see that your income is likely to continue, not that you're about to retire or lose a contract.

Property and appraisal requirements

The home itself has to meet FHA standards. An FHA appraiser will inspect it to make sure it's safe, structurally sound, and worth the price you're paying. The property must have a functioning roof, plumbing, electrical system, and heating. Major safety hazards — like lead paint in homes built before 1978, mold, or foundation cracks — can cause the appraisal to fail.

If the appraisal comes back lower than the purchase price, you have options: renegotiate the price with the seller, put down more money, or walk away. The home also has to be a single-family house, a condo in an FHA-approved complex, a townhouse, or a manufactured home that meets FHA standards. Investment properties and vacation homes don't may have access to.

Citizenship and residency status

You must be a U.S. citizen or a permanent resident (green card holder) to get an FHA loan. You'll need a valid Social Security number. If you're a permanent resident, bring your green card and any other immigration documents the lender requests. Non-citizens with work visas do not may have access to for FHA loans.

The home must be your primary residence — the place where you actually live most of the year. You cannot use an FHA loan to buy a second home, a vacation property, or an investment property. If you're moving for a job or other reason, you can refinance later, but at the time you explore, you have to intend to live there.

Frequently Asked Questions

What if I have no credit history or a very thin credit file?

Some lenders will work with you using alternative credit data — utility bills, rent payments, insurance payments, or cell phone bills that show you pay on time. You may need to provide more documentation than someone with a traditional credit score, and you might face a higher interest rate. Ask lenders whether they accept alternative credit before you explore.

Can I get an FHA loan if I'm still paying off a previous foreclosure?

Yes, but timing matters. Most lenders require at least two years to pass after a foreclosure closes before you can get an FHA loan. If you can show that the foreclosure was caused by a one-time event — a job loss, medical emergency, or divorce — some lenders may shorten this waiting period. Bring documentation of what caused the foreclosure.

Does my spouse's income and credit count if we're married?

If you're both on the mortgage, both incomes and both credit scores count. If only one of you is explore, only that person's information matters. If one spouse has poor credit and the other has good credit, you might explore with just the spouse who has the stronger profile, though you'll lose access to the other person's income.

What if my debt-to-income ratio is too high right now?

Pay down debt before you explore. Paying off a car loan or credit card balance lowers your monthly obligations and can push your ratio below the 43 percent threshold. Even paying down balances without closing accounts helps. Wait a few months after paying down debt before explore so the lower balances show up on your credit report.

Can I use a gift for the entire down payment?

Yes, as long as the gift is truly a gift and not a loan you have to repay. The person giving the money must sign a gift letter stating that no repayment is expected. The gift can come from a family member, a nonprofit organization, or a government down payment information program. You'll need to provide bank statements showing the money arrived in your account.