Asked by ntnttthomas  |  Submitted February 04, 2016

I see that you can get a FHA loan with a 500 credit score. I found 2 houses, how would I estimate the down payment for each?

One house is $79,000 and the other is $99,000

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  Answers  |  3

February 04, 2016

The minimum down payment required for an FHA loan is 3.5% of the contract purchase price. There is no limit on how much you can put down. The down payment can be your own funds or it can come from family members (or a combo of both). Down payment funds cannot come from the seller or anyone else who is party to the transaction.

Please also consider the need to account for closing costs and 'pre-paid' items. These costs can come from anyone (you, family, seller, agent or lender).

$commenter.renderDisplayableName() | 09.24.17 @ 01:43

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February 09, 2016

The required down payment for FHA borrowers with scores OVER 580 is 3.5%. Those seeking an FHA loan with scores under 580 are required to put 10% down. Note that loan approval is based on more than just scores, and the lower a borrower's scores, the more compensating factors can be required, such as reserve funds after closing, low debt ratios, etc.

$commenter.renderDisplayableName() | 09.24.17 @ 01:43

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February 09, 2016

Ted's right. Below 580 the down pmt required does increase. Note that after 6 payments your scores should start to increase (assuming all else is clean) which should (over time) put you on a course to get out of FHA and into a conventional loan. This could save a lot of money. Even just the difference in MI for a conventional loan vs FHA MI makes that a worthy target. FHA is a stepping stone, or can be.

$commenter.renderDisplayableName() | 09.24.17 @ 01:43

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