FHA loan down payment
With the FHA, the minimum down payment depends on your credit score. With a credit score of 580 or higher, the minimum down payment is 3.5%. With a score of 500 to 579, the minimum down payment is 10%. The required down payment on a $200,000 home is either $7,000 or $20,000* depending on your credit score ($200,000 x 3.5%) ($200,000 x 10%)*
Down Payment as A Gift
If haven’t currently saved for your down payment, don’t worry because one of the strongest benefits of an FHA loan is that borrowers can obtain the down payment as a gift.
The down payment of 3.5% can be a gift, as long as the person gifting the down payment meets FHA guidelines. A family member, employer, & even a friend can gift you the funds for your down payment as long as the is not an expectation of repayment.
Many first time home buyers need lower down payment options and an FHA loan meets those needs. The FHA required down payment is only 3.5% with a credit score of 580+ The down payment can be saved or can obtained by a family/friend member as a gift as well.
FHA loans also have more flexible credit & debt ratio requirements than most mortgages.
If you don’t remember anything from this article, please remember, If you have a 580 or higher FICO score you willl only need a 3.5% down payment. Getting approved for an FHA mortgage with a 580+ score is much more likely than if your score is below 580.
However, getting approved for an FHA home loan with a credit score in the 500-579 range is difficult but not impossible. You will need work with an Alliance member to strengthen your application.
Click here to Request a free mortgage analysis from an Alliance member