500 Credit Score FHA Loan
An FHA loan is the only mortgage a 500 score can reach, and it comes with a 10% down payment. Here is the honest path.
FHA is the one loan program that allows a 500 credit score, and it requires 10% down at that level instead of the usual 3.5%. You also need a lender that writes below the common 580 overlay, because most will not. It is possible, but 580 changes the math enough that it is usually worth a short wait.
What 500 Means for FHA
HUD allows FHA scores from 500 to 579 with 10% down. Above 579 the down payment drops to 3.5%. So at 500 you are paying nearly three times the down payment of a buyer 80 points higher, on the same loan. On a $300,000 home that is $30,000 instead of $10,500.
The other hurdle is the lender. Most Florida lenders overlay FHA at 580 and will decline a 500 outright. Mortgage Capital works with investors who still lend in the 500–579 band, so the door is open if the rest of your file is clean and documented.
| Factor | FHA at a 500 Score |
|---|---|
| Down Payment | 10% required |
| Lender Availability | Limited — most overlay at 580 |
| Mortgage Insurance | Upfront + monthly, life of loan |
| Smart Move | Build to 580 for 3.5% down |
What a 500 score changes for FHA Loan
Credit scores work in bands rather than single points, so the score either side of yours is what decides whether the terms move. Here is what the nearest bands do to a fha loan in Florida, and what the same 500 reaches on other programs today.
Reach 510: Possible with 10% down. See 510 with FHA Loan
If you are close to the band above, it is usually worth asking a lender what it would take to get there before you lock anything in. Paying down a revolving balance is the fastest lever most borrowers have, and it can move a score within one billing cycle.
One thing worth knowing before you read too much into a number: lenders do not use the score you see on a free credit app. They pull all three bureaus and work from the middle score, and on a joint application they use the lower borrower’s middle score. Ask which score a lender is working from before you assume you sit in a particular band.
What else a 500 score reaches
VA Loan at 500: Not yet — most lenders want 580.
Conventional Loan at 500: Not available — path to qualify.
Jumbo Loan at 500: Not available — far from jumbo credit.
Refinance at 500: Streamline may still work.
500 Credit Score FHA Loan — FAQ
Yes, FHA technically allows 500 with 10% down, but only a lender that writes below the common 580 overlay will approve it. The rest of your file needs to be clean. For most buyers, reaching 580 first to get 3.5% down is the better move.
HUD sets FHA at 10% down for scores of 500 to 579 and 3.5% down at 580 and up. The higher down payment offsets the added risk of a lower score. That single rule is why 580 is such an important target.
Verify the details for your own situation against these government and agency sources: HUD FHA loan program and HUD Handbook 4000.1 (FHA rules).
A FHA Loan With a 500 Score?
Get matched to the right Florida loan for your score · Licensed FL mortgage broker NMLS# 1859012
Rates are illustrative only. APR and payments vary by credit score, loan amount, and market conditions. Subject to credit approval. Not a commitment to lend. NMLS# 1859012. Equal Housing Lender.