FHA minimum requirements: what HUD actually publishes
Nelson Paredes · REALTOR® · One Stop Realty Center Inc
Updated October 20, 2026
Four floors
FHA does not lend you the money: it insures an approved lender's loan, and HUD publishes the floor that lender must respect in four things.
They are credit, down payment, debt and the loan insurance. Each has a rule written by HUD, the federal housing agency. Meeting them approves nothing: your lender weighs the whole file and may ask for more.
Read in HUD's official sources: Mortgagee Letter 2026-11, Handbook 4000.1 and Mortgagee Letter 2023-05. Still to confirm, case by case: the numeric definition of each factor in your favor, the current threshold of the insurance table, and whatever your lender asks above the floor. Checked October 18, 2026.
Almost everything circulating about FHA mixes HUD's floor with what a lender asks. Here they are kept apart, each floor with the official rule behind it.
The lender does not use the first score you show it. HUD orders it to work out the decision credit score (MDCS). Of the scores reported for each person, the middle one counts if there are three, the lower one if there are two, and that one if there is just one. If you buy with someone else, the lowest in the group rules.
Your decision score The most the loan can finance Minimum down payment 580 or higher 96.5% of the value 3.5% 500 to 579 90% of the value 10% Below 500 Not eligible for FHA insurance No FHA loan through this path - Newer scoring models do not move these floors. HUD will add newer score models (FICO 10T and VantageScore 4.0) for cases assigned from January 1, 2027, and put in writing that the 500 and 580 floors stay the same.
- No credit history is not the same as bad credit. If you have no traditional history, HUD allows you to reach the maximum financing, but an underwriter reviews your case by hand and counts payments like rent and utilities.
- HUD's floor is not your lender's floor. A 620 you are asked for is that lender's rule, not FHA's. If you are told no with a score above 580, FHA did not close the door: that lender set its own floor.
To raise your score before buying, see what score you actually need.
HUD calls it the minimum required investment. It is based on the adjusted value: in a purchase, the lower of the sale price and the appraised value (the valuation by the FHA appraiser). If the home appraises below the price, the minimum is measured on the appraisal, and the gap to the price comes out of your pocket.
It does not have to come only from your savings. HUD's handbook accepts:
- Your savings and accounts, documented.
- A gift that is not repaid, from a relative, your employer or union, a charitable organization, a government agency with a buyer program, or a close friend with a clearly defined, documented interest in you. The lender asks for a signed gift letter and a traceable transfer.
- Government assistance. HUD clarified that its rules on interested parties do not block money from a government entity that originates your loan through its housing program, with papers that prove it. Whether a specific assistance program combines with your loan is confirmed by the lender and the program, with both sets of documents. There is down payment help in Miami-Dade.
None of that money can come from the seller, from anyone who gains from the purchase (the agent, the builder, the lender itself), or from someone they will reimburse. That is treated as an incentive and is deducted from the price.
FHA compares what you pay each month with your effective income (the income the lender can count under the handbook). There are two ratios: the housing one (the total payment on the home) and the total one (housing plus all your fixed debts). When a person reviews your file by hand, the handbook publishes this matrix:
Your decision score Maximum ratios (housing / total) What it takes Below 580, or no score 31 / 43 Nothing stretches them, even with points in your favor 580 or higher 31 / 43 No factors in your favor 580 or higher 37 / 47 One of three: cash reserves, a minimal increase in the housing payment, or residual income, documented 580 or higher 40 / 40 No discretionary debt 580 or higher 40 / 50 Two of the four factors, documented The factors in your favor (compensating factors) are only four: verified cash reserves, a minimal increase in your housing payment compared with the current one, significant additional income not counted in your effective income, and residual income (what is left after all your payments).
This matrix is the one for a manual review. Many files go first through HUD's automated system, which weighs the whole file, and the handbook does not publish a single table of maximum ratios for it. If a site promises a higher limit as if it were HUD's rule, it is selling some lenders' practice. And being under the limit does not approve you either: the lender also looks at your payment history and the stability of your income.
Every FHA loan pays mortgage insurance in two parts. HUD publishes the rates and they are the same for everyone: they do not depend on your score.
The upfront premium is 1.75% of the base loan, once. It is paid at closing (the day you sign the purchase) or added to the loan.
The annual premium is a percentage of the balance, collected spread across your payments. For the most common case (a loan of more than 15 years, below the table's threshold), HUD's Mortgagee Letter 2023-05 sets it like this:
Down payment Annual premium How long it lasts Less than 5% 0.55% The whole loan term 5% to less than 10% 0.50% The whole loan term 10% or more 0.50% 11 years The most misunderstood part. With less than 10% down, which is nearly everyone who uses FHA, the annual premium lasts the whole loan. It does not drop off when you reach 20% of the home being yours, as with other loans. It ends only if you refinance into another loan type or sell.
The table's threshold is the national loan limit, which changes every year: confirm the current one with HUD. Above that threshold the premiums are higher (0.70% to 0.75%), and loans of 15 years or less have their own table in HUD's letter.
Before your credit and your down payment, FHA looks at the building: either HUD approved it, or your unit wins single-unit approval. It is explained in Buying a condo with an FHA loan. Meeting the floors in this guide approves no loan: the decision belongs to an FHA-approved lender, case by case. Closing expenses are in closing costs in Florida.
- HUD, Mortgagee Letter 2026-11 (October 8, 2026; in effect from January 1, 2027; the floors and the ratio matrix do not change), decision score and ratio matrix: hud.gov
- HUD, Handbook 4000.1 (Update 18), minimum investment and sources of the money: hud.gov
- HUD, release 23-041 and Mortgagee Letter 2023-05, annual premium: archives.hud.gov
We tell you whether you are ready and what is missing.
These floors are the program's; your case depends on numbers of yours that are not on this page. Leave us your number and we work through it with you.
This guide orients you, it does not advise you. The ranges are estimates, and final terms are set by the lender, the insurance company, or the homeowners or building association, based on your specific case.
