FHA Loan Requirements

The Federal Housing Administration's mortgage guarantee program provides a way for potential homeowners to access loan funds without perfect credit or a large down payment. These loans are often favored by lenders because the FHA provides insurance from loss should the borrower default on the loan. This decreased risk leads to lower interest rates and more lenient qualification requirements, though borrowers must still meet whatever underwriting requirements their lender has in place.

Credit History

The FHA does not have minimum credit requirements to qualify for a loan guarantee. However, if your credit score is below 580, you must put at least 10 percent down. Borrowers with credit scores above 580 can provide a 3.5 percent down payment. Any bankruptcy must be at least 2 years old and any foreclosure must be at least 3 years old. If you have a thin credit file or have not yet started building a traditional credit history, you can use electric, water, gas and phone bill records to show a history of on-time payments.

Work History

You must have at least two years of steady work history. If you graduated from college in the past two years, you may be able to receive a loan without the two-year work requirement if you are currently working in your field of study. Although the FHA prefers that you worked for the same employer during this time, working in the same profession or industry will suffice.


The FHA does not have minimum income requirements, but your income must be stable or rising over a two-year period and sufficient to cover your current debt as well as your new mortgage payment. FHA-backed loan payments can equal no more than 31 percent of your monthly income. Your total debt, including credit cards, other loans and the mortgage, can equal no more than 43 percent of your monthly income.

Closing Funds

You must have at least 3.5 percent of the loan in cash to make the down payment and pay closing costs. The funds must be properly seasoned and sourced. This means the money must be in your possession -- in a bank, investment or retirement account -- for at least two months prior to its use as a down payment. You cannot use loans, credit cards or unverifiable funds. Any gifted money must be accompanied by a letter stating who the gift is from, when it was given and the amount. Gifted funds must also be seasoned for at least two months.

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