FHA draws a hard line at 580. Above it you can finance up to 96.5 percent of the home's value. Below it, down to 500, the ceiling drops to 90 percent. In practice that single point decides whether you need a small down payment or a large one.
Eligible for maximum financing: up to 96.5 percent of the adjusted value on a purchase, which is the familiar 3.5 percent down.
Limited to a maximum loan-to-value of 90 percent, so at least 10 percent down.
On a purchase, "adjusted value" is the lower of the purchase price, less any inducements to purchase, and the appraised value. The examples below assume the home appraises at or above the price and there are no inducements.
At 580: $8,750 down. At 579: $25,000 down. Difference: $16,250.
At 580: $10,500 down. At 579: $30,000 down. Difference: $19,500.
At 580: $14,000 down. At 579: $40,000 down. Difference: $26,000.
Those figures are the down payment alone, before closing costs. They are also only the FHA floor - many lenders set their own higher minimum, so the realistic question is often whether you can find a lender working at 580 at all.
A few points is often closer than it looks, and the math above is usually the argument for waiting a short time rather than buying now with 10 percent down. Before deciding, check two things.
Which score is actually counting. If you have three scores, FHA uses the middle one; with a co-borrower it uses the lowest person's. It is common to be closer to 580 - or further from it - than a single app score suggests. The full rule is on which score counts.
Whether the lower score belongs to someone else. If a co-borrower's score is the one below 580 and you can qualify without their income, removing them may put the loan back at maximum financing. If you have no score at all, a different route applies, covered on FHA with no credit score.
What not to do while waiting: open new accounts, close old ones, or let a balance creep up. Rescoring and genuine improvement both take time, and a new inquiry or a higher utilization can move you the wrong way.
Source: HUD Handbook 4000.1, II.A.2.b.i Loan-to-Value Limitations Based on Borrower's Credit Score, II.A.2.b.ii Purchase, and the Adjusted Value definition in II.A.2.a Maximum Mortgage Amounts (Update 17, issued 11/26/2025). Read the section in full before relying on it; FHA policy is set by HUD and changes, and individual lenders may require more. Not a commitment to lend.
Five minutes on the phone beats five weeks of guessing. We will compare your situation against actual lender requirements - not advertised ones - and give you a straight answer either way. Already been turned down over your score? See MortgageDeclined.com.