Housing Counselor Certification (HUD) Practice Exam

What is the minimum qualifying credit score for an FHA mortgage if the client makes a 3.5% down payment?

620 700 580 640

Correct Answer:

580

Explanation:

A minimum qualifying credit score of 580 is established by the Federal Housing Administration (FHA) for borrowers who want to make a down payment of 3.5% on an FHA-insured mortgage. This lower credit score requirement is one of the appealing features of FHA loans, as it provides opportunities for individuals with less-than-perfect credit to access home financing. While a higher credit score can lead to better loan terms and lower interest rates, the 580 threshold allows a broader segment of potential homeowners, including first-time buyers and those recovering from financial setbacks, to qualify for a mortgage. Thus, making a down payment of 3.5% distinctly aligns with the 580 minimum credit score requirement for FHA loans.

Access more questions from this quiz

Continue to Housing Counselor Certification (HUD) Practice Exam for more practice questions and the full quiz experience.

Access More Questions