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FHA loans · HUD Handbook 4000.1FHA credit score and down payment: 580 for 3.5% down, 500–579 for 10% down

FHA uses a Minimum Decision Credit Score (MDCS) to set how much a buyer may borrow. With an MDCS at or above 580, the borrower is eligible for maximum financing – for a purchase, 96.5% of the adjusted value, so a 3.5% minimum required investment. With an MDCS between 500 and 579, the loan-to-value is limited to 90%. The MDCS is the score on the credit report when all scores are the same; with three scores it is the median, with two different scores the lower, with one score that score. With several borrowers, the lender takes each borrower's MDCS and uses the lowest. Borrowers with non-traditional or insufficient credit can still get maximum financing, but must be manually underwritten. Lenders often set higher minimums of their own.

Score → maximum financing (HUD 4000.1)

  1. 580 or higher

    Maximum financing: 96.5% of the adjusted value on a purchase (3.5% minimum investment).

  2. 500–579

    Maximum loan-to-value 90% (at least 10% down).

  3. No traditional credit

    Eligible for maximum financing, with manual underwriting.

How the decision score is chosen

  1. Three scores

    The median.

  2. Two different scores

    The lower one.

  3. One score

    That score.

  4. Several borrowers

    Each borrower's MDCS, then the lowest of them.

What the TC watches

  • A co-borrower with a lower score sets the decision score for everyone.
  • A buyer near 580 should avoid new credit until closing – a drop can change the down payment.
  • Ask the lender for its own minimum – many are above HUD's.

Questions buyers ask

What credit score do I need for an FHA loan with 3.5% down?

A Minimum Decision Credit Score of 580 or higher qualifies for maximum financing – 96.5% of the adjusted value on a purchase (HUD Handbook 4000.1).

Can I get an FHA loan with a 550 credit score?

HUD allows scores between 500 and 579 with a maximum 90% loan-to-value, so at least 10% down – though many lenders set higher minimums.

Which score does FHA use if I have three?

The median of the three. With two different scores it is the lower one, and with several borrowers the lowest decision score among them.

Related guides

ClosingCode's loan update message reminds an FHA buyer, in English or Spanish, to avoid new credit until closing – you review it and send it.

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Source: HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Minimum Decision Credit Score; Maximum LTV for purchases), last revised August 12, 2026 (hud.gov, read October 25, 2026).

General information about FHA-insured loans, not legal or financial advice. Lenders can add stricter rules (overlays). ClosingCode is software; it is not a lender. This guide is not a substitute for the advice or services of an attorney.