FHA minimum credit score: 580 vs 500

The short answer

Two numbers decide everything on this page, and they are 500 and 580. Below 500, FHA-insured financing is off the table. From 500 through 579 you can still qualify, but the Handbook caps the loan at 90 percent loan-to-value (LTV). At 580 and above you are eligible for maximum financing. The common shorthand of "580 for 3.5 percent down, 500 for 10 percent down" is therefore close to the Handbook, with one correction: the Handbook speaks in LTV limits, and the down payment is simply what is left over after the loan.

What "minimum decision credit score" means

The Handbook does not say "your credit score". It defines the Minimum Decision Credit Score, or MDCS, as the score reported on the credit report when all reported scores are the same. Where three scores are reported, the median score is the MDCS. Where two differing scores are reported, the MDCS is the lowest of the two. Where only one score is reported, that is the MDCS.

So a report showing 640, 612 and 598 produces an MDCS of 612, the middle one. A report showing only two scores, 640 and 585, produces 585. The calculator above applies exactly this rule. That is why the score a lender quotes can differ from the one you saw on a free app: the app may show one bureau, and the lender is working from the median of three.

Two borrowers on one loan

The MDCS is worked out for each borrower, and then the lowest one is used for the whole loan. If you score 700 and your co-borrower scores 575, the file is treated as a 575 file and the 90 percent LTV limit applies. If one borrower has no credit score at all, because of non-traditional or insufficient credit, the lender uses the lowest MDCS among the borrowers who do have a score. Enter two borrowers in the calculator to see this happen.

What 580 and 500 do to the loan

The LTV table in the Handbook has just two rows. At or above 580, the borrower is eligible for maximum financing. Between 500 and 579, the borrower is limited to a maximum LTV of 90 percent. For a purchase, maximum financing is 96.5 percent of the adjusted value. Here is the arithmetic on a home with a $300,000 adjusted value:

• MDCS 580 or higher: 96.5 percent is $289,500, so the minimum down payment is $10,500 (3.5 percent).
• MDCS 500 to 579: 90 percent is $270,000, so the minimum down payment is $30,000 (10 percent).

That is a difference of $19,500 in cash on this one home, which is why a score sitting at 575 is worth real effort to move. These figures are the base loan before the upfront mortgage insurance premium, closing costs and the nationwide mortgage limits, so your actual numbers will differ.

Refinances use the same two tiers

The refinance tables follow the same cut points. In the 203(k) rehabilitation section the table says a borrower at or above 580 is eligible for maximum financing of 97.75 percent, and a borrower between 500 and 579 is limited to 90 percent. Other refinance programs set their own maximum LTV in the program rules. The Handbook also lists transactions where the MDCS review does not apply: Section 247, Section 248, Streamline Refinances and Assumptions.

The part people miss: ratios under 580

The score also changes how your debts are judged. For a loan that has to be manually underwritten, the matrix says that borrowers with an MDCS of 500 to 579, or with no credit score, may not exceed 31/43 ratios, and no compensating factors can raise that. That means the housing payment can be at most 31 percent of effective income and total fixed payments at most 43 percent. At 580 and above, the same 31/43 needs no compensating factors, and with the right ones the matrix allows 37/47, 40/40 or 40/50. So a 575 and a 585 are not just on different sides of an LTV line; the 585 has much more room on debt.

Where 620 comes in

One other number shows up in the credit-score text. If a first-time homebuyer wants the lender to count a positive rental payment history in the automated underwriting run, the MDCS must be 620 or greater and the rent must have been $300 or more a month, paid on time for the previous 12 months. It is a separate route, not a higher minimum for FHA itself.

Limits of this page

The Handbook sets the floor, not what every lender will lend to. A lender can add its own requirements on top of FHA's, and many do. Ask the lender what minimum score it will actually accept before you spend money on an appraisal. Also remember the score is only one input: the Handbook goes on to cover payment history, collections, judgments and bankruptcy, which you can read about on related pages. See also the student loan payment rule and the Chapter 7 waiting period.

Sources

• HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook, Update 18 PDF: Origination/Processing, Borrower Minimum Decision Credit Score, Handbook pp. 151-152; Loan-to-Value Limitations Based on Borrower's Credit Score, pp. 179-180; 203(k) refinance table, p. 416; Manual Underwriting approvable ratios, p. 359; Positive Rental Payment History (TOTAL), p. 212. Read November 2, 2026.
• HUD, Single Family Housing Policy Handbook 4000.1 information page. Read November 2, 2026.

Text read: HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook, the clean Update 18 PDF that HUD links from its Handbook 4000.1 information page (HUD lists it as the August 12, 2026 update). Confirm current requirements with an FHA-approved lender, who may apply stricter standards of its own. This page paraphrases the Handbook and does not replace it. Page numbers cited are the Handbook's own and may be approximate; use the section headings to locate the text.