FHA Loans in 2026: Requirements, Limits, MIP and Who Qualifies

FHA loan requirements are simpler than most people expect. In 2026 you generally need a credit score of at least 580 to put 3.5% down, or a score between 500 and 579 with 10% down. You also need steady income, debts that fit HUD’s limits, a home you will live in, and a loan amount within your county’s FHA limit. Since May 2025, you must also be a US citizen, a lawful permanent resident, or a citizen of one of three Pacific nations.

An FHA loan is a mortgage made by a private lender and insured by the Federal Housing Administration, part of the US Department of Housing and Urban Development (HUD). The insurance protects the lender if you stop paying. That protection is why lenders can accept lower scores and smaller down payments. You pay for it through mortgage insurance premiums.

This guide walks through every requirement, using HUD’s current rules as of October 2026.

Who qualifies for an FHA loan?

You can qualify for an FHA loan if you have a credit score of 500 or more, a valid Social Security number, steady income you can document, a debt load within HUD’s ratios, and lawful permanent residence or US citizenship. The home must be your main residence and meet HUD’s property standards.

Here is the core checklist, drawn from HUD Handbook 4000.1, last revised August 12, 2026:

You do not need to be a first-time buyer. Repeat buyers can use FHA too, as long as the home will be their principal residence.

What credit score do you need for an FHA loan?

You need a Minimum Decision Credit Score of at least 500. With 580 or higher, you are eligible for maximum financing, which means 3.5% down. With 500 to 579, the loan-to-value ratio is capped at 90%, so you need 10% down. Below 500, HUD does not allow FHA financing.

Keep two practical points in mind. First, many lenders set their own minimums above HUD’s floor, so a lender may decline a 560 score even though HUD allows it. Second, borrowers with no credit score at all are not shut out. They are underwritten by hand using alternative credit, such as rent and utility payment history.

The 580 versus 500 tiers in practice

How much is the FHA down payment?

The FHA down payment is 3.5% of the price or appraised value, whichever is lower, if your score is 580 or more. HUD calls this the Minimum Required Investment. If your score is 500 to 579, the minimum is 10%. The money can come from savings, a gift, or an approved assistance program.

Gifts from family members, employers and some nonprofits and government agencies are allowed when documented. Many state and local programs also pair with FHA loans. Our down payment assistance programs guide explains how grants and forgivable second mortgages work.

Sellers and other interested parties may contribute up to 6% of the sales price toward your closing costs, prepaid items, discount points and the upfront MIP. They cannot cover your 3.5% minimum investment.

What are the FHA loan limits for 2026?

For FHA case numbers assigned on or after January 1, 2026, the one-unit loan limit ranges from a $541,287 floor in lower-cost counties to a $1,249,125 ceiling in high-cost counties. Limits rise for two- to four-unit homes. Your exact limit depends on the county where the home sits.

HUD announced these figures in December 2025 (HUD press release 25-145). They track the 2026 conforming loan limit of $832,750 set by the Federal Housing Finance Agency.

Alaska, Hawaii, Guam and the US Virgin Islands have higher, specially adjusted limits. Some high-cost counties sit between the floor and the ceiling. Check your county on HUD’s FHA mortgage limits lookup before you shop.

How much is FHA MIP?

FHA mortgage insurance has two parts. The upfront premium is 1.75% of the base loan amount, usually added to the loan. The annual premium for most 30-year loans is 0.55% of the balance when you put less than 5% down, or 0.50% with 5% or more down, paid monthly.

The annual rates below come from HUD’s MIP schedule (Handbook 4000.1, Appendix 1.0), unchanged since Mortgagee Letter 2023-05 took effect on March 20, 2023. We found no later change as of October 2026.

Loans of 15 years or less have lower annual rates, from 0.15% to 0.65%. If you want to compare MIP with private mortgage insurance in detail, see mortgage insurance explained.

What debt-to-income ratio does FHA allow?

For manually underwritten FHA loans, the baseline is 31% of income for housing costs and 43% for total monthly debts. With documented compensating factors, HUD allows up to 37/47, 40/40 or 40/50. Loans approved through FHA’s automated TOTAL Scorecard can sometimes exceed these ratios.

Energy-efficient homes can use stretch ratios of 33/45. If you want to see how FHA’s ratios stack up against other programs, our mortgage requirements by loan type guide lines them up side by side.

What are FHA property requirements?

The home must be your principal residence and meet HUD’s Minimum Property Requirements and Minimum Property Standards. An FHA-approved appraiser checks that the home is safe, structurally sound and secure. Problems such as peeling paint in older homes, a failing roof or missing handrails usually must be fixed before closing.

FHA loans can finance one- to four-unit homes, approved condominiums and some manufactured homes on a permanent foundation. At least one borrower must move in within 60 days of signing and plan to live there for at least one year. FHA does not insure investment properties under its standard purchase program.

The FHA appraisal is not a full home inspection. A separate inspection, paid by you, is still a good idea.

FHA 203(k): buying and fixing in one loan

The FHA 203(k) program lets you roll repair costs into your mortgage. A Limited 203(k) covers minor, nonstructural work, with total rehabilitation costs up to $75,000. A Standard 203(k) handles larger remodels, has a minimum repair cost of $5,000 and requires an FHA-approved 203(k) consultant. Both follow the usual FHA credit and income rules.

Can non-permanent residents get FHA loans?

No. For FHA case numbers assigned on or after May 25, 2025, non-permanent residents are not eligible. That includes DACA recipients and people on work visas such as H-1B. Lawful permanent residents and citizens of Micronesia, the Marshall Islands and Palau remain eligible on the same terms as US citizens.

HUD made this change in Mortgagee Letter 2025-09, issued March 26, 2025. It removed the entire non-permanent resident section from the handbook. The letter also notes that a Social Security card alone does not prove immigration or work status.

The change also affects existing FHA borrowers who are non-permanent residents. HUD removed their path to future FHA transactions, including streamline refinances. If this applies to you, plan any refinance with a lender that offers conventional or non-QM options.

If FHA is closed to you, other paths exist. Our guide to a mortgage for immigrants covers conventional rules for visa holders, and our ITIN mortgage guide covers loans for borrowers without a Social Security number.

How do you apply for an FHA loan?

You apply through an FHA-approved lender, not through HUD. The process looks much like any mortgage: check your credit, gather documents, get preapproved, find a home, then move through appraisal, underwriting and closing. Comparing at least two or three lenders helps, because rates, fees and credit overlays vary.

1. Check your credit reports for free at AnnualCreditReport.com and dispute errors early.
2. Confirm your residency status and Social Security number, since both are verified.
3. Gather documents: two years of income records (W-2s, tax returns), recent pay stubs, two months of bank statements, and gift letters if relied on.
4. Get preapproved by one or more FHA-approved lenders and compare Loan Estimates.
5. Look up your county’s FHA limit so your price range fits.
6. Make an offer and order the FHA appraisal through your lender.
7. Finish underwriting, fix any required repairs, and close. Move in within 60 days.

Ask each lender for its own minimum credit score for FHA loans. HUD’s floor is 500, but many lenders set a higher one. Knowing this up front saves time and hard credit pulls.

Is FHA the right loan for you?

FHA tends to work best for buyers with credit scores in the 500s or low 600s, small savings, or higher debt ratios. Buyers with strong credit and at least 5% to 10% down often pay less over time with a conventional loan, because PMI can be removed and MIP usually cannot.

Our side-by-side guide to FHA vs conventional loans runs the numbers for several situations. If you have military service, a VA loan is usually cheaper than FHA. If you are buying in a rural or small-town area, compare a zero-down USDA loan as well. You can browse every government program on our government loans hub.