Key takeaway580 is HUD’s dividing line: at 580+ you qualify for 3.5% down; at 500–579 the minimum down payment jumps to 10%. That single line is worth tens of thousands in cash to close.
What concretely changes at 580
- 580 is HUD’s dividing line: at 580+ you qualify for 3.5% down; at 500–579 the minimum down payment jumps to 10%. That single line is worth tens of thousands in cash to close.
- Expect the full FHA mortgage insurance stack: 1.75% upfront MIP (usually financed) plus annual MIP around 0.55% for most 30-year terms, score does not change MIP, unlike conventional PMI.
- Many lenders add overlays above HUD minimums: it is common to see lenders requiring 600 or 620 even for FHA. A broker can place you with lenders whose overlays stop at 580.
- Manual underwriting is more likely at 580, expect deeper documentation of reserves, rent history, and compensating factors.
Requirements at this band
| Minimum score | 580 for 3.5% down (500–579 needs 10% down) |
|---|---|
| Down payment | 3.5% minimum at 580 |
| Upfront MIP | 1.75% of loan amount |
| Annual MIP | ~0.55%/yr on most 30-year loans |
| DTI | Up to ~56.9% with automated approval; lower on manual |
| Overlays | Many lenders require 600–620; shop lenders, not just rates |
Figures are typical market ranges as of October 2026. Actual terms depend on the lender, your credit, the property and the program, and are confirmed on your Loan Estimate or term sheet.
Smart moves at 580
- Do not assume one denial is final, overlays vary enormously by lender at 580.
- A 20-point gain to 600 measurably widens your lender pool; pay down revolving balances first.
- Document 12 months of on-time rent, it is a powerful compensating factor in manual underwriting.
FAQ
Can I get an FHA loan with exactly 580?
Yes, 580 is the published HUD threshold for 3.5% down. The challenge is lender overlays, not HUD rules: many lenders set higher minimums, so placement matters.
Is 580 enough for FHA with no other issues?
Usually yes with automated underwriting approval. Thin reserves plus high DTI at 580 can push the file to manual underwriting, which is stricter.
What changes if I reach 600?
More lenders compete for your file, some pricing improves, and manual-underwriting risk falls. The down payment stays 3.5%, that threshold was already cleared at 580.