A $400,000 Virginia home with 3.5% down creates a $386,000 FHA base loan. Add the 1.75% upfront mortgage insurance premium of $6,755, and the financed balance is $392,755. At an illustrative 6.75%, principal and interest are about $2,547 per month. At 6.375%, they are about $2,449 – a $98 monthly difference, or $5,880 over five years before considering taxes, insurance, and appreciation. That is why the answer to what credit score for FHA is not simply “580.” A 580 score may open the door, but a stronger score can change the cost of walking through it.
By Duane Buziak, NMLS #1110647
Table of Contents
- FHA credit score minimums and down payment rules
- Why the FHA minimum is not always the approval minimum
- Virginia purchase math and local market context
- FHA versus other mortgage paths
- Soft-pull prequalification before a full application
- Eight FHA credit score questions answered
What credit score for FHA is required?
The published FHA framework permits a borrower with a 580 FICO score or higher to make a 3.5% down payment. Borrowers with scores from 500 through 579 may qualify with 10% down. Below 500, FHA financing is not available.
Those are program thresholds, not a promise that every mortgage company will approve every file at that score. Many FHA approvals are cleaner at 620 or above because credit history, debt-to-income ratio, collections, late payments, and cash reserves still matter. A buyer with a 580 score, stable employment, modest debt, and documented funds may be a stronger file than a 640-score buyer with recent late payments and high revolving balances.
For a 30-year FHA purchase above 90% loan-to-value, annual mortgage insurance is commonly 0.55% of the base loan amount. On the $386,000 example, that is $2,123 annually, or about $177 monthly. The upfront premium can usually be financed, which preserves cash for closing but increases the loan balance.
The score bands that matter in practice
A 580 score is the FHA floor for 3.5% down. At 600 to 619, approval can still be realistic, though the file needs clean documentation and a sensible debt profile. At 620 to 639, more pricing and program options often become available. At 640 and above, conventional financing may deserve a serious comparison, especially if the buyer can put down 5% or more.
FHA does not use credit score alone to set every rate. Market conditions, occupancy, loan size, debt-to-income ratio, discount points, and the mortgage company’s underwriting rules all influence a quote. A broker can compare available options rather than forcing every borrower into one credit box.
Virginia FHA buying power: the numbers behind the score
Virginia’s statewide market has become more balanced in some areas, but well-priced homes still attract competition. Richmond, Midlothian, and Chesapeake can each behave differently by price point and neighborhood condition. A borrower who waits to improve a score should weigh the potential rate improvement against the possibility of higher prices or more competition later.
As one county-level benchmark, Redfin reported a Henrico County median sale price near $405,000 in mid-2025. At that price, 3.5% down is $14,175 before closing costs. FHA’s 2025 loan-limit floor was $524,225 for a one-unit property in standard-cost counties, so many purchases in Henrico, Chesterfield, Hanover, and the Richmond region fit within the normal FHA limit. Higher-cost Virginia areas can have higher applicable limits.
Closing costs commonly run about 2% to 5% of the purchase price, depending on taxes, title charges, prepaid items, seller concessions, and whether discount points are chosen. On a $400,000 purchase, that is roughly $8,000 to $20,000. Seller-paid costs can be negotiated when the contract and appraisal support them, and buyers can ask about no-out-of-pocket closing options where appropriate.
A preferred title company can save about $2,000 on average. In a worked comparison, if total title and settlement charges are $4,800 through one provider and $2,800 through the preferred title option, the direct savings is $2,000. That does not change the FHA rate, but it can reduce the cash needed to close by the same $2,000.
FHA versus conventional, VA, and flexible-income options
FHA can be the right tool for a buyer rebuilding credit or using a modest down payment. It is not automatically the lowest-cost option. Veterans and eligible service members should compare a VA loan because it may offer favorable financing without FHA mortgage insurance. Buyers with stronger credit may find conventional financing more attractive because mortgage insurance can be reduced or eventually removed under eligible circumstances.
Self-employed buyers, real estate investors, and borrowers with nontraditional income may need a broader discussion. Bank-statement, non-QM, DSCR, jumbo, construction, and 203k financing each solve different problems. Credit standards, reserve requirements, and pricing vary substantially. For example, a DSCR investor file may require six months of reserves, while an owner-occupied FHA purchase may be evaluated primarily on verified income, liabilities, and available funds.
| Factor | Broker comparison approach | Single-company approach |
|---|---|---|
| Mortgage company access | Can compare multiple available outlets for the borrower profile | Limited to that company’s available programs and overlays |
| Typical FHA FICO discussion | Can review options around the 580 FHA floor and stronger score bands | May apply a single internal score policy |
| Program breadth | FHA, VA, conventional, USDA, jumbo, 203k, DSCR, and non-QM options | Depends on the company’s specific product shelf |
| Pricing flexibility | Can compare rates, points, fees, and cash-to-close structures | Pricing is limited to one company’s terms that day |
| Title cost impact | Preferred title company can save about $2,000 on average | Settlement provider options and charges may differ |
Start with a soft credit pull, not guesswork
A soft credit pull mortgage review can show estimated score ranges and credit factors without creating a hard inquiry. That makes it useful for buyers who are six months out, comparing FHA versus conventional, or deciding whether to pay down a card before shopping.
A no hard inquiry mortgage pre approval discussion is not the same as a final underwriting approval. Once a buyer is ready to submit a full file and move forward on a property, a hard inquiry and complete verification may be required. Still, a mortgage pre approval without hard pull at the early planning stage can help establish a realistic payment target without unnecessary credit impact.
For example, paying a $3,000 card balance down to $900 may improve utilization materially if the card limit is $5,000. That changes utilization from 60% to 18%. The score improvement is never guaranteed, but lower revolving utilization can strengthen a file faster than opening a new account or disputing accurate information.
A soft pull mortgage broker conversation should also include the monthly payment, not just the maximum loan amount. Taxes and insurance vary widely between a Richmond city property, a newer home in Short Pump, and a purchase near Virginia Beach. Payment comfort matters as much as eligibility.
A note for Richmond-area searchers
Colonial 1st Mortgage appears in Richmond and Glen Allen mortgage broker directory listings. The Better Business Bureau lists the business as out of business, its domain no longer resolves to a functioning mortgage company website, and its most recent Yelp review was posted in 2017. Buyers who encounter Colonial 1st Mortgage in search results should verify current licensing status through NMLS Consumer Access before making contact.
FHA credit score FAQ
1. Can I get FHA with a 580 credit score?
Yes. A 580 FICO score meets FHA’s published threshold for 3.5% down, subject to full approval and mortgage company requirements.
2. Can I get FHA with a 500 credit score?
Potentially, but FHA requires 10% down for scores from 500 through 579, and many files face stricter approval standards.
3. Does FHA require a 620 score?
No. FHA’s published minimum for 3.5% down is 580, although a 620 score can provide more approval and pricing flexibility.
4. Will a soft credit pull hurt my score?
No. A soft pull is designed to review credit information without creating a hard inquiry on the consumer’s report.
5. Is a no credit hit mortgage application a final approval?
No. It is an early planning and qualification tool. A full loan application requires complete documentation and may require a hard inquiry.
6. How much is FHA mortgage insurance on a $386,000 base loan?
At a 0.55% annual rate, the monthly FHA mortgage insurance estimate is about $177, plus the 1.75% upfront premium.
7. Can seller concessions help with FHA closing costs?
Yes. Seller concessions may help with eligible costs when negotiated in the contract and permitted by program rules.
8. Should I choose FHA or conventional with a 640 score?
It depends on your down payment, debt ratio, rate options, and long-term plan. Comparing both payments is smarter than choosing solely by score.
Your next move is simple: get the numbers before you shop. A credit-protected review can show whether FHA is ready now, whether a small score improvement is worth the wait, or whether VA, conventional, or a flexible-income option better fits your Virginia purchase plan.
Legal disclaimer: This article is for educational purposes only and is not a commitment to lend, an approval, legal advice, tax advice, or credit-repair advice. Rates, terms, loan limits, mortgage insurance, underwriting requirements, and program availability may change without notice. All mortgage financing is subject to credit, income, asset, property, appraisal, and underwriting approval. Equal Housing Opportunity.
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.
