What Are the Down Payment Requirements for FHA Loans in 2026? The FHA rules for down payments come from HUD Handbook 4000.1. The rules depend on your FICO credit score. The minimum down payment is 3.5% of the purchase price for buyers with a FICO of 580 or higher. This is the standard for most FHA borrowers.
On a $400,000 home, a 3.5% down payment equals $14,000. Compare that to conventional loans, which often require 5-20% down. Learn more about FHA loan program details to understand how FHA fits with other options.
FHA Down Payment Requirements 2026: Rules + Exceptions
- FHA loans require a 3.5% minimum down payment for borrowers with FICO scores of 580 or higher. This is one of the lowest down payments among mortgage programs.
- Borrowers with FICO scores of 500-579 need to put down 10%. Below 500, FHA loans are not available.
- Down payment funds can come from gifts. Family members, employers, unions, or non-profit groups can gift the full 3.5%.
- Down payment assistance programs help many buyers cover the FHA down payment. State housing agencies, cities, and non-profits offer grants and low-interest loans.
Written by: John Tappan, NMLS #394171 | 25 years experience | Fact-Checked ✓
Exceptions Based on Credit Score
Your FICO score changes what down payment you need for an FHA loan. Here are the rules:
- FICO 580 or higher: 3.5% down payment
- FICO 500-579: 10% down payment
- FICO below 500: Not eligible for FHA loans
Borrowers with lower scores need to put down more money because the loan carries more risk. Many lenders add their own rules on top of HUD’s rules. These extra rules are called “lender overlays.” Some lenders require 620 or 640 minimum FICO even though HUD allows lower. Shop different lenders to find one that follows HUD’s basic rules. For borrowers with no FICO at all, see FHA loans with no credit score.
Exceptions for Down Payment Sources
The 3.5% down payment does NOT have to come from your own savings. FHA allows several other sources:
- Gift funds from family, employers, unions, or non-profits (the full 3.5% can be gifted)
- Down payment assistance grants from state housing agencies, cities, and counties
- Retirement account withdrawals (401k or IRA) with proper documentation
- Sale of personal property like a car or investment account
Gift funds require a signed gift letter proving the money is a gift, not a loan. The letter must include the giver’s name, relationship to you, gift amount, and a statement that no repayment is required. Gifts cannot come from anyone with a stake in the sale (like the seller or real estate agent).
Disability-Related Exceptions
FHA does not have specific down payment reductions for people with disabilities. However, many state housing programs offer special help for disabled buyers. Some state HFAs (Housing Finance Agencies) run programs that provide extra down payment help for buyers with disabilities. The HUD Section 8 Homeownership Voucher Program can help voucher holders with disabilities buy homes. Contact your state HFA to ask about disability-specific programs. For broader help, review FHA first-time buyer program details.
Common Sources That Count
Save the 3.5% in a savings or checking account. Keep the funds “seasoned” (in the account for 60+ days). This proves the money is yours, not borrowed. Also review FHA loans for bad credit borrowers for other tips.
Can I get seller concessions with an FHA loan?
When obtaining an FHA loan, sellers have the flexibility to contribute up to 6 percent of the home’s sales price in concessions. For instance, on a $400,000 home purchase, the seller can provide concessions of up to $24,000. It’s important to note that these concessions are not provided as cash directly to the buyer; instead, they are applied directly to cover closing costs and prepaid expenses.
Can I use down payment grants with FHA loan programs?:
Regarding down payment grants, they are indeed a form of down payment assistance that can be utilized in conjunction with FHA home loans.
There are countless down payment assistance programs that are available throughout the United States, with at least one in every state and many cities and counties also provide their own programs.
Each down-payment assistance home loan program operates under its specific set of rules. Some programs offer assistance with closing costs, while others do not. Certain down-payment assistance programs exclusively cater to first-time buyers.
If you meet the eligibility home buyer grants criteria, you might receive a low-interest FHA loan that can be repaid alongside your primary mortgage. Alternatively, you could be granted substantial sums through home buying grants, which means you won’t need to repay any funds.
Sources: HUD Handbook 4000.1 (FHA Single Family Housing Policy Handbook); HUD Section 8 Homeownership Voucher Program.
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