A Virginia buyer purchasing a $400,000 home with FHA financing would put down 3.5%, or $14,000, and borrow $386,000 before financed upfront mortgage insurance. At a 6.50% illustrative 30-year fixed rate, principal and interest is about $2,440 per month. If a credit profile only qualifies for 7.00%, that payment rises to about $2,569 – a $129 monthly difference and $7,740 over five years before considering the mortgage insurance impact. That is why the question, what credit score FHA borrowers need, is not just about clearing a minimum. It is about how much choice and pricing your file earns.
For Virginia homebuyers in Richmond, Chesterfield, and Virginia Beach, FHA can be a strong path when cash reserves or credit history make conventional financing less attractive. The federal FHA floor is lower than many buyers expect, but broker overlays, debt-to-income ratio, recent credit events, and automated underwriting findings still matter.
By Duane Buziak, NMLS #1110647
Table of Contents
- The FHA credit score minimum
- Why the score is not the whole approval
- Virginia price and loan-limit context
- How FHA compares with other paths
- Protecting your credit while shopping
- Frequently asked questions
What Credit Score FHA Loans Require
The core FHA guideline is straightforward. A borrower with a 580 FICO score or higher may be eligible for the FHA 3.5% minimum down payment. A borrower with a 500 to 579 FICO score may be eligible with 10% down. Scores below 500 are not eligible under standard FHA rules.
Those are FHA baseline requirements, not a promise that every broker channel will approve every file at those scores. Many available programs establish their own credit-score floor, often 580 or 600, because lower scores can create tighter underwriting conditions. A 580 score with stable income, modest monthly debt, documented assets, and clean recent payment history can be more financeable than a 640 score carrying high revolving balances and a recent late payment.
The official FHA handbook is the governing source for program rules, including minimum decision-credit-score treatment and down-payment requirements: HUD FHA Single Family Housing Policy Handbook 4000.1.
The practical score targets
For many Virginia buyers, 580 is the FHA entry point, 620 is a more comfortable working score, and 640-plus can improve the available choices. FHA mortgage insurance does not disappear simply because a score rises, but a stronger score can affect the rate, the underwriting response, and whether conventional financing becomes competitive.
Do not assume a credit app score shown in a consumer app is the same score used for mortgage underwriting. Mortgage credit reports typically use industry-specific scoring models and a middle-score approach for borrowers with three scores. When two borrowers are applying, the qualifying score is generally the lower borrower’s applicable middle score.
Why the Score Is Not the Whole Approval
FHA approval is a full-file decision. Credit score starts the conversation; it does not finish it. Underwriting reviews your income, employment or self-employment documentation, liabilities, assets, property appraisal, and payment history.
A buyer with a 600 score may still need to show that collections, charge-offs, or late payments are explained and that the current housing payment is manageable. A borrower who recently changed jobs may be fine if the work is in the same line and income is stable. A self-employed borrower in Glen Allen or Charlottesville needs tax-return and business-income analysis that supports the qualifying income, not simply gross deposits.
Debt-to-income ratio also changes the picture. FHA’s automated underwriting can support ratios above older rule-of-thumb limits when compensating factors are strong, but that depends on the file and the approval findings. Cash reserves, a lower payment shock, verified income stability, and limited discretionary debt can help. There is no responsible single DTI number that guarantees an FHA approval.
FHA also requires mortgage insurance. On the $386,000 base loan in the opening example, the 1.75% upfront mortgage insurance premium is $6,755. It is commonly financed, making the starting loan balance $392,755. Annual mortgage insurance is then paid monthly and depends on the loan term, loan-to-value ratio, and current FHA schedule. Ask for a written loan estimate that separates principal, interest, mortgage insurance, taxes, homeowners insurance, and any HOA dues.
Virginia Price and Loan-Limit Context
A score requirement only has meaning in the market you are trying to buy. Virginia’s statewide median sales price was $429,000 in 2025, according to Virginia REALTORS market data. Local gaps are meaningful. Redfin reported a $400,000 median sale price in Henrico County in mid-2025, while higher-priced areas around Fairfax and Arlington can require substantially larger loan amounts and cash-to-close planning. See the current county trend page at Redfin Henrico County housing market.
Inventory and competition vary sharply. A well-priced starter home in Midlothian or Short Pump can still attract fast attention, while buyers in parts of Hampton Roads may find different negotiation room depending on property condition and season. Prequalification before touring seriously lets you understand the payment ceiling and move quickly when the right property appears.
For conventional loans, the 2025 baseline conforming loan limit is $806,500 for a one-unit property in most U.S. counties, with higher limits in designated high-cost areas. The official annual figures are published by the Federal Housing Finance Agency. FHA county loan limits differ from conforming limits, so a broker should verify the specific county and property type before a buyer writes an offer.
FHA vs. Conventional, VA, and Non-QM Options
FHA is not automatically the cheapest answer for every lower-score borrower. A veteran or eligible service member should compare FHA against a VA loan, because VA financing can offer no down payment and does not require monthly mortgage insurance. The program’s details are available at the U.S. Department of Veterans Affairs home loan page.
Conventional financing may become attractive around 620 to 680 and above, particularly when a buyer has more down payment or expects to remove private mortgage insurance later. USDA can fit eligible rural areas in Virginia. For investors, DSCR financing can qualify from property cash flow rather than personal employment income. Bank statement and other non-QM programs can serve self-employed borrowers whose tax returns do not show the whole income picture.
| Decision point | Mortgage broker approach | Single-shelf retail approach |
|---|---|---|
| Lender access | Can compare available investor channels for the individual file. | Usually limited to that company’s in-house menu. |
| FICO floors | May have access to different FHA overlays, subject to underwriting. | Uses its own published overlay and credit policy. |
| Program breadth | Can review FHA, VA, conventional, USDA, jumbo, DSCR, and non-QM options. | Program selection depends on its internal offerings. |
| Pricing flexibility | Can compare rate-and-fee structures across available channels. | Pricing is set within the company’s own platform. |
| Closing-cost planning | Can coordinate seller credits and ask about no-out-of-pocket closing options. | Options depend on that company and transaction structure. |
In any comparison, look beyond the note rate. Origination charges, discount points, mortgage insurance, lender credits, title costs, and the expected time you will keep the loan all matter. Our preferred title company can save an additional $2,000 on average, but the final title charge depends on the county, purchase price, ownership history, and transaction details.
Protecting Your Credit While Shopping
A soft credit pull mortgage review can help you understand your likely direction without creating a hard inquiry. That makes a no hard inquiry mortgage pre approval conversation valuable when you are early in the process, repairing credit, or comparing FHA against VA or conventional options.
A mortgage pre approval without hard pull is not the same as a final approval. Once you choose a property and move into formal underwriting, a complete application and credit report may be required. Still, a soft pull mortgage broker review can identify score thresholds, likely payment ranges, and credit items worth addressing before you write an offer.
Avoid opening new credit accounts, moving unexplained large deposits, or paying off collections without first reviewing the mortgage impact. Paying down a revolving card can help utilization quickly; closing an older account can sometimes reduce available credit and work against the score. A no credit hit mortgage application discussion is most useful when it produces a clear next step rather than a generic score estimate.
Frequently Asked Questions
What is the minimum FHA credit score?
FHA allows 580 for 3.5% down and 500 to 579 for 10% down, though broker overlays may require a higher score.
Can I get FHA with a 580 score in Virginia?
Possibly. Approval also depends on income, debt, recent credit history, assets, appraisal, and automated underwriting findings.
Does FHA require a 640 credit score?
No. A 640 score is not FHA’s federal minimum, but it can provide more program options and potentially stronger pricing.
Does a soft pull affect my credit score?
No. A soft inquiry does not affect your FICO score, unlike a hard inquiry used for a formal credit application.
Is FHA better than conventional with a 620 score?
It depends on down payment, mortgage insurance, debt ratio, property type, and rate options. Compare both with full payment figures.
Can FHA help after late payments?
Potentially, if the late payments are not recent or are adequately documented. The timing, pattern, and reason all matter.
How much are FHA closing costs in Virginia?
Typical closing costs commonly run about 2% to 5% of the purchase price before seller credits, prepaid items, and negotiated title charges.
Can I use FHA for an investment property?
Generally no. FHA is designed for a borrower’s primary residence, subject to occupancy requirements.
FHA is a practical tool, not a label. Start with your verified income, realistic payment comfort zone, and the score you have today. From there, the right broker conversation can show whether a modest credit improvement, a different loan type, or a better cash-to-close structure gives you the strongest position.
Legal disclaimer: Mortgage programs, rates, credit-score requirements, loan limits, mortgage insurance, and underwriting guidelines are subject to change without notice. This article is for educational purposes only and is not a commitment to lend, approval, or a guarantee of terms. All loans are subject to credit, income, asset, property, appraisal, and underwriting approval. Equal Housing Opportunity.
Duane Buziak, Mortgage Maestro | NMLS: 1110647 | Licensed in VA · FL · TN · GA | UWM PRO ELITE 2025 | UWM Top 20 Purchase LO Virginia 2025 | UWM Speed to Close Industry Leading 2025 | Scotsman Guide Top Originator 2025 & 2026 | VA Broker of the Year 2024-2025 | Top 1% Nationwide | Coast2Coast Mortgage | DuaneBuziakMortgageMaestro.com | duane@coast2coastml.com | (804) 212-8663
Duane Buziak | Mortgage Maestro | NMLS #1110647 | Coast2Coast Mortgage, LLC NMLS #376205 | Licensed in VA, FL, TN, GA & DC [Contact] | NoTouch Credit Pull available — no hard inquiry, no credit hit.
