CONDO OWNERSHIP
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Say you earn $6,000 a month before taxes, your middle credit score is 604, and you carry a $410 car payment and a student loan that shows a $0 payment because it is in deferment. A bank told you no on a conventional loan. Can you qualify for an FHA mortgage? Probably, but the student loan will count against you in a way you might not expect, and the answer depends on numbers you can check before you apply.
To qualify for an FHA mortgage, you generally need a credit score of at least 580 to put 3.5 percent down (or 500 to 579 with 10 percent down), a debt load the lender can approve, either through FHA's automated scorecard or within HUD's 31/43 ratio benchmarks for manual underwriting, two years of documented income history, enough time since any bankruptcy or foreclosure, and a plan to live in the home. The home itself also has to qualify. All of it comes from HUD's Single Family Housing Policy Handbook 4000.1.
Those are HUD's minimums. Individual lenders may add stricter requirements of their own, called overlays, so a denial from one lender does not mean every FHA lender will say no.
If you are still deciding whether FHA is the right loan at all, start with our explainer on what an FHA loan is and what its mortgage insurance costs. The rest of this page assumes you have already settled on FHA and want to know whether you will be approved.
Leevli Editorial
| Requirement | HUD standard |
|---|---|
| Credit score | 580 or higher for maximum financing; 500 to 579 limited to 90 percent loan-to-value; below 500 ineligible |
| Down payment (Minimum Required Investment) | At least 3.5 percent of the adjusted value; cannot come from the seller or other interested parties |
| Debt-to-income | Weighed by the TOTAL scorecard; on manual underwriting, 31/43 with stretches to 40/50 with compensating factors |
| Employment and income | Most recent two years verified; extra rules for gaps and self-employment |
| Chapter 7 bankruptcy | Two years after discharge, or 12 months with documented extenuating circumstances |
| Chapter 13 bankruptcy | 12 months of on-time plan payments and the court's written permission |
| Foreclosure, deed-in-lieu or short sale | Generally three years, with limited exceptions |
| Federal debt | No delinquent federal non-tax debt, checked through CAIVRS |
| Occupancy | Move in within 60 days and intend to stay at least one year |
| Residency | U.S. citizens, lawful permanent residents and citizens of three Compact nations |
HUD does not look at "your score" in the casual sense. It uses a Minimum Decision Credit Score. If three scores come back, the middle one counts; if two differ, the lower one counts. With more than one borrower, the lender takes each person's decision score and uses the lowest. A spouse with a 560 can pull a couple from the 3.5 percent tier into the 10 percent tier.
The tiers themselves are simple:
Borrowers with no credit score at all can still qualify using nontraditional credit, such as rent and utility payment history, but the file must be manually underwritten and held to 31/43.
The scoring models are changing. Under Mortgagee Letter 2026-11, issued October 8, 2026, FHA will accept FICO 10T and VantageScore 4.0 alongside Classic FICO for case numbers assigned on or after January 1, 2027. The lender may submit more than one model but must use the same model types for every borrower; when it submits several, each borrower's score is the lowest of the scores selected from each model. HUD states that the existing minimum score thresholds, 500 and 580, stay the same whichever model is used.
Keep lender overlays in mind. Many lenders set their own minimum above 580 or price lower scores less favorably. Ask each lender for its minimum score in writing before you pay for an appraisal.
Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income, as the CFPB explains in its plain-language definition. FHA looks at two versions. The first, often called the front-end ratio, divides only the new housing payment by income. The second, the back-end ratio, adds every other monthly debt.
Most FHA files go through TOTAL Mortgage Scorecard, FHA's automated underwriting tool. When TOTAL returns an Accept, it has weighed your ratios together with the rest of your credit profile, and the handbook does not apply the manual ratio table to that file. When TOTAL returns a Refer, or when certain credit events force a downgrade, a human underwriter takes over and the limits below apply.
| Decision credit score | Maximum ratios (housing/total) | What you need to use them |
|---|---|---|
| 500 to 579, or no score | 31/43 | No stretch allowed |
| 580 and above | 31/43 | No compensating factors needed |
| 580 and above | 37/47 | One: verified cash reserves, a minimal increase in housing payment, or residual income |
| 580 and above | 40/40 | No discretionary debt |
| 580 and above | 40/50 | Two: reserves, minimal payment increase, significant income not counted, or residual income |
Energy-efficient homes can use stretch ratios of 33/45 instead of 31/43.
Take the buyer from the opening, with $6,000 a month in gross income. At 31 percent, the housing payment can reach $1,860. At 43 percent, all debts together can reach $2,580. The housing payment covers more than principal and interest. HUD's definition includes property taxes, hazard insurance, flood insurance where required, the FHA mortgage insurance premium, HOA or condo dues and any special assessments.
That last part changes which homes fit. A $1,860 budget that includes $380 in condo dues leaves far less for the loan itself than the same budget on a house with no association. Our breakdown of how HOA fees affect your mortgage walks through that calculation, and the guide to condo property taxes explains why the tax line can rise after you buy. Lenders also want proof of coverage, so price the policy early using our guide to hazard insurance.
HUD requires lenders to include every student loan in your debts, whatever its status. If your credit report shows a payment above zero, the lender uses that payment or your documented actual payment. If it shows zero, the lender must use 0.5 percent of the outstanding balance. A deferred $40,000 student loan becomes a $200 monthly debt in the ratio. The only way around it is written proof from the servicer that the balance was forgiven, canceled, discharged or paid in full.
In the opening example, $410 for the car plus $200 for the student loan leaves $1,970 under the 43 percent ceiling for housing, more than the $1,860 front-end limit, so the front-end ratio is the binding one on a manually underwritten file.
FHA sets no minimum income and no income cap for its standard purchase program. The question is whether your income is stable, documented and likely to continue.
Your down payment needs the same paper trail. Gifts are allowed from family members, an employer or labor union, a close friend with a documented interest in you, charities and qualifying government programs. The lender needs a signed gift letter and proof of the transfer. The seller, the builder and anyone else who profits from the sale cannot fund your 3.5 percent.
FHA is known for shorter waiting periods than many conventional programs, but they still apply, measured to the date your lender gets an FHA case number.
Delinquent federal debt is a separate barrier. Lenders check every borrower against HUD's Credit Alert Verification Reporting System, known as CAIVRS. A verified delinquent federal non-tax debt, such as a defaulted federal loan or a deficiency from a past FHA loan, makes you ineligible until you resolve it with the agency.
Occupancy. At least one borrower must move into the home within 60 days of closing and intend to live there for at least a year. FHA generally insures only one principal residence per borrower at a time, so an FHA loan cannot finance a rental purchase.
Residency. U.S. citizens and lawful permanent residents qualify on the same terms, and so do citizens of the Federated States of Micronesia, the Republic of the Marshall Islands and the Republic of Palau. Mortgagee Letter 2025-09, issued March 26, 2025, eliminated eligibility for non-permanent residents. Lenders could apply it immediately and had to apply it to case numbers assigned on or after May 25, 2025. A Social Security card alone does not prove status; the lender needs immigration documentation.
The property. The loan must fit under your county's FHA limit, which for 2026 ranges from $541,287 to $1,249,125 for a one-unit home according to HUD's 2026 loan limit announcement. The home must pass an FHA appraisal for safety and soundness. A condo must be in an FHA-approved project or pass single-unit approval; our guide to FHA qualified condos covers how to check, and the guide to the non-warrantable condo explains why a building can fail lender review on the conventional side as well. If that hurdle is pushing you toward a house instead, our condo vs house comparison weighs the other trade-offs.
Taking over a seller's FHA loan is the one path that skips property eligibility, but not borrower review. As our guide to assumable mortgage listings explains, the servicer underwrites the assuming buyer much like a new FHA borrower.
If your situation is complicated, such as a recent bankruptcy, irregular income or a co-borrower with weak credit, a HUD-approved housing counseling agency can review your file with you before a lender does. A buyer weighing townhomes in Houston's The Heights, for example, can have a counselor check the full payment, dues included, against FHA's ratios first, then shortlist homes on Leevli listings that fit the number.
Underwriting turns on numbers that residents know before lenders do: what the dues really are, whether an assessment is coming and how the association handles lender paperwork.
Listings show the property, but they rarely explain the lived reality around it. On Leevli, a mover can explore the city, review neighborhood and building information, and ask a verified resident the specific questions that remain unanswered. That human layer helps readers know what to investigate before signing a lease, making an offer, or choosing between two addresses.
HUD's floor is 500. With a decision score of 580 or higher you can borrow up to 96.5 percent of the home's value, which means 3.5 percent down. From 500 to 579 the loan is capped at 90 percent, so you need 10 percent down. Many lenders set higher minimums of their own, so check each lender's requirement before you apply.
For manually underwritten loans, HUD's baseline is 31 percent for housing and 43 percent for total debt. With a 580 score or higher, compensating factors such as cash reserves or residual income can stretch that to 37/47 or 40/50. Files approved by FHA's TOTAL scorecard are weighed as a whole rather than against that table.
No. FHA sets no minimum income and no maximum for its standard purchase loan. What matters is that your income is verified for the last two years, is likely to continue, and supports the payment within the debt ratio limits. A common mistake is assuming a recent raise or new side job counts right away; many income types need a history first.
For Chapter 7, two years from the discharge date, or as little as 12 months with documented circumstances beyond your control. For Chapter 13, you can apply after 12 months of on-time plan payments if the bankruptcy court gives written permission. The clock is measured to the date your lender obtains the FHA case number, so time your application carefully.
Generally three years from the date the property was transferred through foreclosure or a deed-in-lieu. Lenders can make exceptions for documented extenuating circumstances, such as a serious illness or the death of a wage earner, if you have reestablished good credit. HUD specifically says divorce does not count as an extenuating circumstance, with a narrow exception when the ex-spouse kept the home.
No. FHA has no first-time buyer requirement. Repeat buyers qualify as long as the home will be their principal residence and they meet the credit and income rules. FHA generally insures only one principal residence per borrower at a time, so if you already own a home with an FHA loan, expect questions about what happens to it.
Yes. Gifts can come from family members, your employer or union, a close friend with a documented interest in you, a charity, or a government homeownership program. The donor signs a gift letter stating no repayment is expected, and the lender documents the transfer. The seller, builder, real estate agent or anyone else who benefits from the sale cannot provide your required 3.5 percent.
Every student loan counts, whatever its status. Lenders use the payment on your credit report or your documented actual payment if it is above zero. If the report shows $0, the lender uses 0.5 percent of the balance, so a $60,000 balance adds $300 a month. A loan can be excluded only with written proof it was forgiven, canceled, discharged or paid off.
Lawful permanent residents can, on the same terms as citizens, with USCIS documentation of their status. Citizens of Micronesia, the Marshall Islands and Palau are also eligible. Since case numbers assigned on or after May 25, 2025, non-permanent residents, including many work visa holders, are no longer eligible for FHA-insured financing under Mortgagee Letter 2025-09.
Applying is the quick part once your credit and documents are in order; the closing then follows the schedule in your purchase contract. The longer timeline is preparation. Waiting periods after credit events, six months back in your line of work after a long employment gap, or two years of self-employment history can each delay the date you become eligible, sometimes by years.
Editorial review: verify current federal and state law, insurance regulations, HOA and condominium statutes, and lender guidelines before relying on any single claim. This article is informational and does not constitute legal, financial, tax or insurance advice.
