At a 580 middle credit score you can buy a house in Florida with an FHA loan and 3.5% down. That score is the exact point where FHA's minimum down payment drops from 10% to 3.5%, which makes 580 the most valuable single point on the FHA scale.
Why 580 is the line that matters
FHA, the Federal Housing Administration, insures mortgages so lenders can approve buyers with lower scores. HUD Handbook 4000.1 sets two credit tiers. At 580 and up, a buyer can get maximum financing, 96.5% of the price. From 500 to 579, the most FHA will finance is 90%, so the buyer brings 10%.
The score that counts is your representative credit score, which is the middle of the three scores from Equifax, Experian and TransUnion. If only two bureaus return a score, the lender uses the lower one. When two people buy together, FHA uses the lower of their two middle scores.
A $300,000 home at 579 and at 580
Here is the same single-family home in Polk County at a 5.75% rate on a 30-year fixed, with property taxes at 0.85% of the price and homeowners insurance at $230 a month. MIP is FHA's mortgage insurance premium: 1.75% upfront, added to the loan, plus an annual premium billed monthly.
| 580 score | 579 score | |
|---|---|---|
| Down payment | $10,500 (3.5%) | $30,000 (10%) |
| Base loan | $289,500 | $270,000 |
| Upfront MIP (1.75%, financed) | $5,066.25 | $4,725.00 |
| Total loan | $294,566.25 | $274,725.00 |
| Principal and interest | $1,719.01 | $1,603.22 |
| Monthly MIP | $132.69 (0.55% a year) | $112.50 (0.50% a year) |
| Taxes and insurance | $442.50 | $442.50 |
| Total payment | $2,294.20 | $2,158.22 |
On this home, one point on the credit report is worth $19,500 of cash at closing. The 580 payment runs $135.98 more a month because more is borrowed, and most first-time buyers would much rather keep the $19,500. To stay inside FHA's 46.9% housing ratio, the 580 buyer needs gross income of at least $2,294.20 divided by 0.469, or $4,891.68 a month.
FHA 100% financing starts at 580
At 580, the 3.5% doesn't have to come from savings at all. FHA 100% financing pairs a 96.5% FHA first mortgage with a down payment assistance second mortgage from a government or housing finance agency program, and that second covers the 3.5%. On this home the second would be $10,500, so the buyer brings nothing for the down payment. Depending on the program, the second carries a small monthly payment, is deferred until you sell or refinance, or is forgiven over time. Some assistance programs set their own floor above 580.
That leaves closing costs. FHA lets the seller pay up to 6% of the price toward them, which is as much as $18,000 on a $300,000 home, and family can gift money toward the rest. With those two pieces in place, a 580 buyer can close with very little of their own cash. The FHA 100% financing guide explains how the second mortgage works.
Program by program at 580
- FHA: Approved with 3.5% down, or with FHA 100% financing.
- VA: VA sets no minimum score of its own, and AAA Capital Funding does VA loans from a 500 score, so 580 clears it with room to spare. Eligible veterans, service members and surviving spouses put $0 down.
- USDA: USDA's handbook sets no minimum score, but most lenders want about 640 for USDA's automated approval, so a 580 buyer usually does better with FHA.
- Conventional: Starts at 620 at most lenders, and at AAA Capital Funding.
If your middle score is in the 570s
A few points can usually be found. A rapid rescore is the quickest route: you pay a credit card down, and the lender asks the bureaus to post the new balance in days instead of waiting for the card company's next monthly report. Taking a card from 90% of its limit to under 30% often adds more points than anything else you can do in a month.
FHA also keeps approving scores from 500 to 579, with 10% down, and every dollar of that 10% can be a gift from a family member. When income is the gap instead of the score, a co-signer adds theirs. The co-signer needs 580 or better too, because FHA uses the lowest middle score of everyone on the loan.
The affordability calculator shows the price your income supports at 3.5% down. For the real number, call AAA Capital Funding at 888-601-8344. We'll pull your scores, confirm which side of 580 you're on and line up the down payment assistance program that matches.