The short answer: A Federal Housing Administration (FHA)-insured purchase mortgage is qualified through a lender's review of credit, documented funds, income and debts, occupancy, and the home's condition. For case numbers assigned before January 1, 2027, the U.S. Department of Housing and Urban Development (HUD) says a Minimum Decision Credit Score (MDCS) below 500 is ineligible, 500-579 is capped at 90% loan-to-value (LTV), and 580 or higher can qualify for maximum financing.
This post is for you if:
- You are comparing FHA with another loan and want the actual qualification checklist.
- You have variable, self-employed, or recently changed income and want to prepare the right records.
- You have a past bankruptcy or foreclosure, or want to check a home's occupancy and property requirements.
Would a quick review of your credit, income, and funds help clarify what to verify before you shop?
Book a callWhat are the basic FHA loan qualifications?
An FHA application is reviewed across credit, funds, income, debts, occupancy, property condition, and loan amount. This table summarizes the main qualification areas and what to prepare.
| Requirement | HUD baseline | Prepare |
|---|---|---|
| Credit/down payment | Score tiers and maximum LTV; 3.5% minimum investment at maximum financing. | Credit report and documented funds. |
| Debt | TOTAL gives Accept or Refer; manual files use HUD ratio guidance. | Monthly debt details. |
| Income | Employment and income history verified. | Pay, work, and tax records. |
| Gifts | Eligible source and transfer proof. | Gift letter and funds trail. |
| Home | Principal residence and HUD property criteria. | Property and intended use. |
| Loan amount | HUD limit lookup. | County and unit count. |
Read my FHA loan overview.
What credit score and down payment do I need?
For case numbers assigned before January 1, 2027, HUD says scores below 500 are ineligible, 500-579 are capped at 90% loan-to-value (LTV), and 580 or higher can qualify for maximum financing.
The 90% LTV tier means a 10% minimum investment against adjusted value. For a purchase at maximum financing, Handbook 4000.1 requires at least 3.5% of adjusted value. Confirm the applicable score model and case-number date; see HUD's score FAQ and the Handbook minimum-investment rule.
How does FHA review debt and automated underwriting?
Debt-to-income (DTI) compares monthly obligations with qualifying income, but one ratio does not decide every FHA file. FHA's Technology Open To Approved Lenders (TOTAL) Scorecard works through an automated underwriting system (AUS).
HUD's manual table lists 31/43 as a baseline; other combinations require specified factors. TOTAL returns Accept or Refer, and HUD says lenders cannot decide solely from that scorecard. Compare HUD's manual ratio guidance with its TOTAL overview.
How do employment, income, and documents affect qualification?
For employment income, FHA requires lenders to verify the most recent two years of work and income. Documents vary by income type and lender review.
HUD's examples include a recent pay stub with written or electronic employment verification, or specified alternative records such as W-2 forms. FHA may consider self-employment income after two years in business; with one to two years in business, the borrower needs at least two years in the same or a related occupation.
Gather income evidence, applicable tax records, employment details, debt information, and records for funds you plan to use. See Handbook 4000.1 income documentation.
Which part of the FHA checklist feels least clear? A short conversation can help you sort the next question.
Talk it throughCan I use gift funds for an FHA down payment?
FHA can allow gifts from eligible sources, but the lender must verify where the funds came from and how they moved. Ask the lender to review the source before transferring funds.
HUD requires a signed donor-and-borrower letter with the donor, relationship, amount, and no-repayment statement, plus transfer documentation. Cash on hand is not an acceptable donor gift source. Handbook 4000.1 lists family, employers or unions, close friends with a documented interest, charities, and public homeownership programs as possible sources. See HUD's gift documentation rules.
What occupancy and property rules apply to an FHA loan?
A standard FHA purchase is for a principal residence, and the home must meet HUD's property criteria. HUD says at least one borrower must occupy within 60 days after signing the security instrument and intend to stay at least one year.
FHA's Minimum Property Requirements describe insured homes as safe, sound, and secure. If an appraiser reports a condition that does not comply, the lender may require repairs or further review. Read HUD's occupancy FAQ and property criteria.
How long after bankruptcy or foreclosure can I apply?
FHA timing depends on the event and underwriting path. Rules use the discharge or property-transfer date and case-number assignment, so have original records reviewed carefully.
| Event | HUD baseline |
|---|---|
| Bankruptcy with TOTAL | Two years since discharge; newer cases are referred to manual underwriting. |
| Chapter 7, manual | Usually two years after discharge; 12 months may be considered for documented extenuating circumstances and responsible financial management. |
| Chapter 13, manual | At least 12 months of the payout period, satisfactory payments, and court permission. |
| Foreclosure or deed-in-lieu (DIL) | Manual underwriting generally uses three years from transfer; TOTAL files within three years are referred. |
The lender must confirm dates and any exception requirements.
Where can I check the FHA loan limit for a home?
FHA loan limits vary by location. HUD provides a live search by state, county, or Metropolitan Statistical Area, so use the property's jurisdiction rather than an old figure.
Select the applicable year and property type, then ask your lender to confirm the limit for the case number. If you are buying in Nevada, see my FHA loans in Nevada page. Open HUD's FHA limit lookup.
Frequently asked questions
Is a good credit score enough for FHA approval?
No. The lender reviews income, debts, funds, and property too.
Does FHA use one DTI limit for everyone?
No. Manual guidance differs from TOTAL underwriting; lenders assess the whole file.
Can I use a gift for the down payment?
Often. The source and transfer must be eligible and documented.
Do I have to live in an FHA-financed home?
A standard FHA purchase is for a principal residence. Special cases may differ.
Can self-employed borrowers qualify for FHA financing?
Yes. Income must meet FHA history, stability, and documentation rules.
Are FHA loan limits the same everywhere?
No. HUD's lookup lists limits by location and property type.
Sources
Last verified October 29, 2026. Programs, limits and fees change, so confirm the current numbers before you rely on them.
- FHA Handbook 4000.1 Update 18, HUD
- Handbook information page, HUD
- Credit score FAQ, HUD
- TOTAL Scorecard, HUD
- Manual ratio FAQ, HUD
- Gift documentation FAQ, HUD
- Principal residence FAQ, HUD
- FHA limit lookup, HUD
If you are ready for a lender to review your full file, you can start your application here.
Start your applicationI am Fabion Medhanie, U.S. Army Retired and a loan officer in Las Vegas. This is education, not a rate quote or a loan approval. Your loan options depend on your full file.
Buying or refinancing in Nevada? See FHA loans in Las Vegas and Nevada and the guide to Nevada down payment assistance.
