FHA Loan Requirements 2026: Credit, Debt, Income and Waiting Periods

Credit score

FHA allows a down payment of 3.5% with a credit score of 580 or higher. Scores from 500 to 579 require 10% down. Those are FHA's rules. Many lenders set their own minimums higher, often 620, which is why a denial from one lender doesn't mean every lender will say no. I work with lenders who go down to FHA's floor.

Debt to income

FHA's standard guidelines are 31% of income for housing and 43% for total debt. With an automated approval and a strong file, FHA can go well beyond that, sometimes into the 50s. Files that need manual underwriting are held closer to the standard ratios, with some room for compensating factors like cash reserves or minimal payment increase. See FHA manual underwriting.

Down payment and gifts

Want to skip the down payment entirely? Compare USDA or, for veterans, VA.

Your down payment can come from savings, a gift from a family member, an employer, or an approved assistance program. Gifts need a signed letter and a paper trail showing where the money came from. Sellers can contribute up to 6% of the price toward your closing costs, but not toward the down payment itself.

Collections and charge offs

FHA doesn't require you to pay off every collection. If your non medical collections add up to $2,000 or more, the lender has to account for them, usually by including a small monthly amount in your debt ratio, setting up a payment plan, or paying them off. Medical collections are generally excluded. Ask before you pay anything off.

Student loans

If your credit report shows a monthly student loan payment, that's what lenders use. If your loans are deferred or show a zero payment, FHA uses 0.5% of the balance as the monthly payment. On large balances, that can change your numbers, so it's worth getting an income driven payment documented before you apply.

Bankruptcy, foreclosure and short sales

See waiting periods by loan type for a side by side table.

Chapter 7: generally two years from discharge.** Chapter 13:** you may qualify after 12 months of on time plan payments with court approval.** Foreclosure or short sale:** generally three years. These are shorter than conventional loans, and exceptions can exist for documented hardships.

Employment and income

Lenders look for a steady two year history, though it doesn't have to be the same job. Gaps can be explained. Self employed borrowers usually need two years of tax returns.

The home

FHA appraisals check that the home is safe, sound and livable. In Florida, older roofs, insurance and condo approvals cause the most issues. See FHA appraisals in Florida and FHA condos.

Denied somewhere else?

See the full FHA loan denied guide.

Get the reason in writing. Common fixes include a lender without a 620 overlay, documenting an income driven student loan payment, resolving collections the right way, or waiting a few months to build clean payment history. Many FHA denials are lender overlays, not FHA rules.

A 590 score and a denial from a bank

Jasmine was denied by her bank because her score was 590 and their minimum was 620. Her income was steady, and her only issue was a medical collection from two years earlier.

We moved her file to a lender that follows FHA's 580 floor. The medical collection didn't count against her, and she closed with 3.5% down plus a gift from her mother.

FHA Income Rules

Salary and hourly

Recent pay stubs and W2s. A two year history, not necessarily one job.

Overtime, bonus and part time

Generally averaged over two years. Less than two years can sometimes work with a strong justification, and declining income is a concern.

Commission

Generally a two year average from tax returns or W2s, with one to two years possible in some cases.

Self employed

Typically two years of tax returns. One year can work with prior experience in the same field. See FHA special situations.

Employment gaps

Short gaps need an explanation. After a longer gap, lenders typically look for about six months on your current job plus a solid history before the gap.

Non taxable income

Social Security, disability and similar income may be grossed up, generally by 15% or the actual tax rate.

Child support and alimony

Counts with a history of receipt and at least three years of continuance.

Rental income

For rentals on your tax return, see how Schedule E is calculated.

Usually 75% of rent. See FHA multifamily.