May 17, 2022

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FHA Loans And Credit Scores: More Lenient Now?


Are FHA home loans getting easier to come by? According to one report in the L.A. Times, the answer is yes. Several sources are reporting that average credit scores on FHA mortgages has “declined steadily”. Combine that with a trend towards higher debt-to-income ratios among borrowers and you have indications that lenders in general may be easing their standards.

For many years, the minimum credit score many lenders would need to approve an FHA loan was between 620 and 640. But with reports of some financial institutions approving FHA mortgages with scores at 600–still well within the FHA guidelines for loan approval–it seems the lending environment has gotten friendlier to borrowers with credit scores in this range.

According to the L.A. Times report, “The FHA theoretically allows credit scores as low as 580. But lenders, buffeted by defaulted loans and demands that they buy back troubled mortgages that they sold, generally have set standards higher since the mortgage meltdown.”

FHA borrowers with lower credit scores may not have access to the most ideal interest rates, but for those looking to get into a home, the low down payment requirements can make up for some of that compared to the down payments needed on many conventional mortgages. FHA loans feature a minimum 3.5% down, as opposed to as much as 20% on conventional loans.

FHA home loans may be easier to come by these days if the reports are any indication, but FHA loan applicants should always compare rates and terms with competing lenders to try to get the most favorable deal. For those looking for an FHA cash-out refinance loan, remember that you aren’t tied to your current lender when looking to refinance. Any participating FHA lender can help you refinance your conventional, VA or FHA mortgage loan.

Do you have questions about FHA home loans? Ask us in the comments section. You can apply or get pre-approved for an FHA loan at, a private company and not a government website.

Joe Wallace - Staff Writer

By Joe Wallace

February 28, 2014

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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