Home loan borrowers that want to obtain FHA mortgage loans have various requirements that have to be met in order to be approved for their loan request. Among the rules to qualify for an FHA mortgage loan are requirements for a minimum credit scores.

The Federal Housing Administration (FHA) periodically announces policy changes that establish the underwriting requirements needed to qualify for an FHA home loan including the minimum credit score needed. At the close of 2010, FHA updated the guidelines governing the minimum credit needed to obtain an FHA loan. Mortgage lenders may impose higher standards than those established by the FHA in order to protect themselves from losses on delinquent loans.

Recent guidelines issued by FHA on the minimum credit scores needed for certain FHA guaranteed home loans include the following.

FHA mortgage loan borrowers are required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. Home loan borrowers with less than a 580 credit score can still obtain an FHA loan, however the minimum down payment for those borrowers with a credit score under 580 is 10%.

Mortgage loans applicants who have a minimum decision credit score of less than 500 are not eligible for FHA mortgages.

The FHA also considers mortgage loan applicants that have no credit score but do have a non-traditional credit history. For those borrowers that do not have a credit score and those who do not use traditional credit, the mortgage lender can verify a credit history from non traditional sources such as utility payment records, rental payments, insurance payments, or other similar credit accounts.

These minimum credit score for an FHA mortgage loans were established in 2010 and may change. The FHA is continually reviews loan underwriting standards and loan performance to better assist home buyers as housing market conditions change. The minimum credit score guidelines and underwriting rules allows the FHA to balance risk and provide access for credit to borrowers to help new and existing homeowners.

Additional resources can be found at What is FHA, What is an FHA Loan, FHA Streamline Refinances. and FHA Mortgage Rates.

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