What is the minimum down payment for an FHA 203(b) loan?

The great news about the FHA 203(b) Basic Home Mortgage Loan program is that you can put down as little as 3.5 percent if your credit score is above 580.

Remember, the FHA 203(b) is called "basic" for a reason. The eligibility requirements are relatively simple, and that includes the down-payment requirements. Making a down-payment of just three and a half percent (3.5) of the loan amount makes buying that first home more attainable to so many people.

For example, Joe and Sue are young, newly married, and expecting a child. Because of their young age, they just haven't had time to save a lot of cash for a down payment. But they've kept their credit scores comfortably above 580, and both have steady jobs that they've worked at for over 3 years. Let's say they find their perfect starter home in a nice neighborhood that costs $220,000. It's possible, with the FHA 203(b) mortgage program, that they may only need $7700 (3.5% of $220K is $7700) as a down payment to move into their dream home!

FHA down payment amounts by home price - an easy lookup table

You can use the table below to find the down payment you would need for an FHA 203(b) loan, based on the price of the home. If your credit score is above 580, then look at the "3.5% Down" column. If your credit score is below 580 , then look at the "10% Down" column:

Home Purchase Price	3.5% Down (your credit score is 580+)	10% Down (your credit score is 500-579)
$50,000	$1,750	$5,000
$100,000	$3,500	$10,000
$150,000	$5,250	$15,000
$200,000	$7,000	$20,000
$250,000	$8,750	$25,000
$300,000	$10,500	$30,000
$350,000	$12,250	$35,000
$400,000	$14,000	$40,000
$450,000	$15,750	$45,000
$500,000	$17,500	$50,000
$550,000	$19,250	$55,000
$600,000	$21,000	$60,000

Here's a breakdown of FHA 203(b) down payment requirements by credit score

How much you need as a down payment on your home purchase depends on your credit score when using the FHA 203(b) loan program. Here's a simple breakdown to see where you stand. In general, the better your credit score, the less you will need to have as a down payment. The worse your credit score, the more up front cash you'll need to have as a down payment when buying a home.

My credit score is above 580

Congratulations! If your credit score is 580 or greater, then you are eligible for "maximum financing" meaning that you can finance the maximum possible amount under the FHA 203(b) guidelines. The maximum financing amount is 96.5% of the home prices. This means you only need as little as 3.5% as a down payment. Keep in mind, however, that some FHA approved lenders might require a higher credit score. The FHA guidelines allow lenders to approve borrowers for maximum financing if they have a credit score as low as 580, but it doesn't force the lender to do so. Some lenders simply have stricter credit requirements than others, so borrowers should shop around.

My credit score is below 580

No worries! You're still in the game as long as your credit score is 500 or higher. If your score is below 580 but above 500, then you still can qualify for an FHA 203(b) loan , but you will need to have a 10% down payment.

My credit isn't so hot (below 500). Can I still get an FHA 203b loan?

If your credit score is below 500, then you won't qualify for the FHA 203(b) loan program. But don't give up hope! There are some very simple ways you can increase your credit score in a relatively short time and then re-apply once it is back above 500. Here are two simple ways to boost your credit score above 500:

• Pay your bills on time. If your credit score is below 500, then you likely have had several late payments recorded. Make an effort to pay everything on time, especially your credit cards.
• Don't max out your credit cards. Find out what the credit limit is for each of your credit cards. Then, try not to use up that whole limit each month.
• Find out what the credit limit is on all of your credit cards, and only use half of that limit or less each month.
• Talk to a HUD housing counselor. The Department of Housing and Urban Development (HUD) sponsors housing counseling agencies around the country to provide free or cheap advice.