FHA Loan Requirements 2026: Credit Score, Down Payment, MIP and Limits
The credit scores and down payments FHA accepts, how its mortgage insurance is priced and when it ends, the 2026 loan limits, debt ratios, property rules and how FHA compares with a conventional loan.
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Key takeaways
- Credit score: 580+ for 3.5% down; 500–579 with 10% down. Many lenders set their own minimum around 580 to 620.
- Mortgage insurance: 1.75% upfront plus an annual premium of 0.55% for most 30-year loans with less than 5% down.
- With less than 10% down, annual MIP lasts for the life of the loan; with 10% or more, it ends after 11 years.
- 2026 loan limits for one-unit homes range from $541,287 to $1,249,125 depending on the county.
The Federal Housing Administration does not lend money. It insures loans made by approved lenders, which lets them accept smaller down payments and lower credit scores. The cost of that insurance is paid by the borrower, which is the key trade-off to understand.
Please note
Based on HUD rules and 2026 loan limits as of October 2026. Lenders can impose stricter requirements ("overlays") than HUD's minimums.
Credit score and down payment
| Credit score | Minimum down payment |
|---|---|
| 580 or higher | 3.5% |
| 500 to 579 | 10% |
| Below 500 | Not eligible |
The down payment may come from savings, a gift from a family member or an approved down payment assistance program. Unlike conventional PMI, FHA's premium rate does not rise with a lower credit score, which is one reason FHA often wins for buyers still building credit.
FHA mortgage insurance (MIP)
Upfront premium
1.75% of the base loan amount, usually financed into the loan.
Annual premium
For loans longer than 15 years, the annual MIP is 0.55% when the loan-to-value ratio is above 95% and 0.50% when it is 95% or less, for loan amounts up to $726,200. Higher rates apply above that amount and different rates to 15-year loans. It is paid monthly as part of your mortgage payment.
How long you pay
If your down payment is less than 10%, the annual premium stays for the life of the loan. With 10% or more down, it ends after 11 years. The only other way to remove it is to refinance into a conventional loan once you have enough equity.
Example
On a $300,000 home with 3.5% down, the base loan is $289,500. The upfront premium of $5,066 is added, for a loan of $294,566. At a 7.28% rate, principal and interest are about $2,015 a month, and the first year's annual MIP adds about $132 a month. HUD bases it on the average balance over the year and adjusts it for the financed upfront premium.
2026 FHA loan limits
FHA limits are tied to the conforming limit set by the FHFA, which is $832,750 for one-unit homes in 2026. The FHA floor in low-cost areas is 65% of that, $541,287; the ceiling in high-cost areas is $1,249,125. Higher limits apply to two- to four-unit properties, and HUD publishes the limit for each county.
Debt-to-income ratio
HUD's standard benchmarks are 31% for housing costs and 43% for total debts. Loans approved through FHA's automated scorecard can go higher when the file is strong, and manually underwritten loans can exceed the benchmarks with compensating factors such as cash reserves or a minimal increase in housing payment. Our affordability guide shows how the ratios translate into a budget.
Other FHA requirements
- Primary residence: you must live in the home, generally within 60 days of closing, for at least a year.
- Property standards: an FHA appraisal checks safety, security and soundness; serious defects must be repaired.
- Steady income and a valid Social Security number; employment history is typically reviewed over two years.
- Waiting periods: generally two years after a Chapter 7 bankruptcy discharge and three years after a foreclosure, with exceptions for documented extenuating circumstances.
- Seller concessions: sellers may pay up to 6% of the price toward closing costs.
FHA vs. conventional: which costs less?
| FHA | Conventional 3% to 5% down | |
|---|---|---|
| Minimum credit score | 580 (3.5% down) | Usually 620 |
| Mortgage insurance pricing | Same for all credit scores | Cheaper with high scores, expensive with low scores |
| Upfront insurance | 1.75% | None (monthly PMI) |
| Removing insurance | Life of loan if under 10% down | Cancelable at 20% equity, automatic at 22% |
| Assumable | Yes, with lender approval | Generally no |
A useful rule: with a score in the mid-700s, a conventional loan usually costs less over time; below roughly 680, FHA is often cheaper or the only option. Ask lenders to quote both. FHA loans can also be taken over by a future buyer; see assumable mortgages.
Frequently asked questions
What is the minimum credit score for an FHA loan in 2026?
HUD allows 580 with 3.5% down and 500 to 579 with 10% down, but many lenders require at least 580 to 620.
Can I remove FHA mortgage insurance?
Only if you put at least 10% down, in which case it ends after 11 years. Otherwise you must refinance, for example into a conventional loan.
Can I use an FHA loan for a second home?
No. FHA loans are for primary residences. You can buy a two- to four-unit property if you live in one unit.
Are FHA rates higher than conventional rates?
FHA interest rates are often similar to or slightly lower than conventional rates, but the mortgage insurance raises the overall cost.
Can I get an FHA loan after bankruptcy?
Generally two years after a Chapter 7 discharge, or after 12 months of on-time payments in a Chapter 13 plan with court approval.
