To qualify for an FHA loan you generally need a 580 or higher credit score for a 3.5% down payment (500 to 579 with 10% down), a manageable debt-to-income ratio, steady income, and a home you will live in as your primary residence. FHA, short for Federal Housing Administration, insures these mortgages, which is why the credit and down payment rules are looser than conventional loans.
Duane Buziak, NMLS #1110647, is a mortgage broker who shops FHA files across 500+ wholesale lenders instead of selling one company’s rate sheet. He starts with the NoTouch Credit Pull: a soft-pull pre-approval that reads your credit without a hard inquiry, unlike the standard pull most companies run at application. That makes no hard inquiry mortgage pre approval possible before you commit to anything. Below you will find the requirements, a worked monthly payment, and how to shop FHA pricing in Virginia, Florida, Tennessee, Georgia, DC, North Carolina, South Carolina and Maryland.
What Credit Score and Down Payment You Need for an FHA Loan
You need a 580 credit score for the 3.5% minimum down payment, and a score between 500 and 579 requires 10% down. Those are the floors in HUD Handbook 4000.1, and HUD’s FHA pages summarize them for borrowers.
A 580 score does not guarantee approval. HUD sets the floor, but each wholesale lender can add an overlay, a stricter requirement layered on top of FHA’s, such as a 620 or 640 minimum score. Two companies can look at the same file and give opposite answers. A broker with access to many wholesale lenders can route a 590 score to one with fewer overlays, while a retail company can only apply its own.
FHA is also not limited to first-time buyers. Repeat buyers can use it if the home will be their primary residence.
Where the down payment can come from
- Your own savings, documented through bank statements.
- Gift funds from an approved donor, such as a relative, with a signed gift letter and a paper trail showing the transfer.
- Down payment assistance (DPA) from state, local or private programs. Ask about programs such as Dynamo and Turbo DPA, but confirm current availability and terms, since DPA programs open, pause and change often.
Checking where you stand first
A soft credit pull mortgage review through the NoTouch Credit Pull shows your score and any overlay problems before a hard inquiry lands on your report. If you sit at 575, you can see whether a few months of paydown or a larger down payment changes your options before you spend any credit.
How Much Debt and What Income History You Can Have and Still Qualify
FHA generally benchmarks a 31% front-end ratio and a 43% back-end ratio, but automated underwriting can approve higher ratios when compensating factors exist, such as cash reserves or a strong payment history. Treat 43% as a planning number, not a hard wall, and confirm the current thresholds in HUD Handbook 4000.1.
Debt-to-income (DTI) compares your monthly debt payments to your gross monthly income. Front-end counts only the housing payment. Back-end counts housing plus car loans, student loans, credit card minimums and other recurring debts. Suppose you earn $6,000 a month before taxes. At 43%, your total monthly debt cap is $6,000 x 0.43 = $2,580, and that cap includes the new mortgage payment, mortgage insurance, taxes and homeowners insurance. If you already pay $600 a month on a car and cards, about $1,980 is left for housing.
Employment and income history
Underwriters typically want a two-year work history, not necessarily two years with one employer. Job changes within the same field are usually easy to document, and gaps can be explained in writing, for example for school, caregiving or medical leave. Self-employed borrowers are generally qualified on tax returns, which can shrink qualifying income after deductions. When FHA does not fit, Bank Statement and other Non-QM options can qualify you on deposits rather than tax returns, usually at a different rate and down payment.
Past credit events
Bankruptcy and foreclosure do not permanently bar you. Under HUD’s guidelines, the typical waiting period is about two years after a Chapter 7 bankruptcy and three years after a foreclosure. A Chapter 13 can qualify sooner with trustee approval after on-time plan payments. Exceptions and extenuating-circumstance rules exist, so verify the current wording in the handbook before relying on any timeline.
Which Homes and Loan Amounts Are Eligible for FHA Financing
The home must be your primary residence and must meet HUD’s minimum property standards at appraisal. FHA does not finance investment properties or vacation homes. Eligible property types include single-family homes, up to four-unit buildings where you occupy one unit, and condos on HUD’s approved list.
Costs unique to FHA
FHA charges mortgage insurance premium (MIP) in two parts. The upfront MIP is 1.75% of the base loan amount, and most borrowers finance it into the loan. The annual MIP is billed monthly. As of October 2026, it is about 0.55% for most 30-year loans at or under the base limit with less than 5% down, but the rate comes from HUD mortgagee letters and can change, so confirm it at hud.gov.
How long MIP lasts depends on your down payment. With less than 10% down at case number assignment, it generally lasts the life of the loan. With 10% or more down, it generally drops off after 11 years. The common claim that MIP always lasts forever is incomplete, though refinancing into a conventional loan later is the usual way out.
2026 FHA loan limits
For 2026, HUD’s one-unit FHA limit is about $541,287 in low-cost areas and $1,249,125 in the highest-cost areas. The ceiling equals 150% of the 2026 conforming baseline of $832,750 set by FHFA, and the floor is 65% of it. County limits vary, and many Florida, Virginia, Maryland and DC counties sit between the two, so check your county at HUD.gov before you set a price range.
Appraisal issues that stall deals
- Peeling or chipping paint, especially on older homes.
- Missing handrails on stairs or railings on decks.
- A roof near the end of its life or with active leaks.
- Exposed wiring, broken windows, or no working heat.
Sellers can often fix these, but build repair time into your contract.
What an FHA Loan Costs Per Month: A Worked Example
On a $300,000 home with 3.5% down, the base loan is $289,500. Adding the financed 1.75% upfront MIP ($5,066) brings the loan to about $294,566. Your monthly cost then depends on the rate and the annual MIP.
The rates below are hypothetical, chosen to show how a rate gap compounds. They are not quotes. For the market backdrop, Freddie Mac’s Primary Mortgage Market Survey publishes a weekly national average each Thursday, so check the latest reading as of October 2026. FHA pricing often differs from that conventional benchmark.
| Line item | Scenario A: 6.5% | Scenario B: 6.875% |
|---|---|---|
| Base loan (96.5% of price) | $289,500 | $289,500 |
| Financed upfront MIP (1.75%) | $5,066 | $5,066 |
| Total loan amount | $294,566 | $294,566 |
| Principal and interest | about $1,862 | about $1,935 |
| Annual MIP (0.55%, year one) | about $133 | about $133 |
| P&I plus MIP | about $1,995 | about $2,068 |
The gap is about $73 a month, or roughly $26,000 over 30 years ($73 x 360 = $26,280). The annual MIP line is 0.55% x $289,500 / 12, about $133, and it is separate from principal and interest. It declines slowly as the balance falls. Property taxes and homeowners insurance come on top, and both vary widely between, say, a Tennessee county and a Florida coastal one.
How Shopping FHA Through a Broker Differs From a Retail Company, and Is This Lower.com?
LowerMortgageRates.com is not Lower.com. It is Duane Buziak Mortgage Maestro, a mortgage broker operating through Coast2Coast Mortgage LLC (NMLS #376205), and it has no affiliation with Lower.com, a direct mortgage company. The similar names confuse a lot of searchers, so check the NMLS number on any quote you receive.
A broker works for you, not for a single set of products. Duane Buziak shops 500+ wholesale lenders per file, so one FHA application can be priced several ways, and overlays can be avoided by choosing a wholesale lender whose rules fit your profile. He also offers a Dare to Compare challenge: bring any other written quote, and he will compare his pricing against it line by line.
The credit pull matters while you shop
Each hard inquiry can lower your score slightly, and rate shopping can stack several. The NoTouch Credit Pull works as a mortgage pre approval without hard pull: the soft check shows your profile to a soft pull mortgage broker, so you can compare options with no credit hit mortgage application at the start. A hard pull comes later, only when you choose to move forward. Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC, NMLS #376205.
| Factor | Duane Buziak (broker) | Rocket Mortgage | Movement Mortgage |
|---|---|---|---|
| Business model | Independent broker | Direct retail mortgage company | Direct retail mortgage company with loan officers |
| Lender access | 500+ wholesale lenders per file | Its own loan products | Its own loan products |
| Pre-approval credit pull | NoTouch Credit Pull, a soft pull with no hard inquiry | Credit review during pre-approval; ask which pull type applies | Credit review during pre-approval; ask which pull type applies |
| Loan programs | FHA, VA, conventional, Non-QM and others, depending on the wholesale lender chosen | FHA and other programs offered in-house | FHA and other programs offered in-house |
| Who sets the rate | The wholesale lender chosen for your file | Rocket Mortgage | Movement Mortgage |
FHA Loan Requirements FAQ: 10 Common Questions
What is the minimum credit score for an FHA loan?
The minimum is 580 for 3.5% down, or 500 to 579 with 10% down. Individual companies may require higher scores through overlays.
What is the minimum down payment for an FHA loan?
It is 3.5% of the purchase price with a 580 or higher score. The money can come from savings, approved gift funds or down payment assistance.
What is the maximum debt-to-income ratio for FHA?
The common benchmark is 31% front-end and 43% back-end. Automated underwriting can approve higher ratios with compensating factors.
What is FHA MIP, and does it cancel?
MIP is FHA’s mortgage insurance, charged as 1.75% upfront plus an annual premium. It lasts the life of the loan with under 10% down and about 11 years with 10% or more down.
Is FHA better than conventional?
FHA often fits lower credit scores or smaller down payments, while conventional can cost less with strong credit because private mortgage insurance can be removed. Compare both on your actual numbers.
How long must I wait after bankruptcy or foreclosure?
Typically about two years after a Chapter 7 and three years after a foreclosure, with Chapter 13 sometimes sooner. Confirm the current rules in HUD Handbook 4000.1.
Can I use gift funds for an FHA down payment?
Yes, from an approved donor such as a family member, with a signed gift letter and documented transfer. The funds cannot be a loan you must repay.
Does FHA allow condos and manufactured homes?
Yes, if they meet HUD requirements. Condos generally must be in an FHA-approved project, and manufactured homes must be on a permanent foundation and meet HUD standards.
Can sellers pay my closing costs on an FHA loan?
Yes, up to 6% of the sale price in seller concessions under current HUD guidelines. This can leave little to nothing out of pocket at closing in some deals, depending on the contract.
Does getting pre-approved hurt my credit?
Not with a NoTouch Credit Pull, which uses a soft inquiry that does not affect your score. A standard pre-approval usually runs a hard inquiry.
Check Your FHA Qualification Before Any Hard Inquiry
FHA qualification comes down to four things: your credit score, your debt-to-income ratio, your income history and the property. You can see where you stand on all four before it costs your credit anything. Don’t let uncertainty about mortgage rates cost you thousands, discover your personalized options with a trusted mortgage professional who can compare rates across multiple lenders without impacting your credit score. Schedule your free consultation today and take the first step toward securing the best mortgage solution for your unique financial goals. Borrowers in VA, FL, TN, GA, DC, NC, SC and MD can start a NoTouch Credit Pull with Lower Mortgage Rates by Duane Buziak at 804-212-8663.