 TITLE: Is an FHA Loan Worth It if You Have Good Credit? CONTENT: Advantages of FHA Loans\n-----------------------\nFHA loans are not limited to first-time homebuyers, but they are meant to help borrowers with limited or spotty credit histories. By design, their eligibility requirements are less stringent than what you'd find with many conventional mortgages that are not backed by government agencies.\n*   **Down payment:** The 3.5% minimum down payment requirement on FHA loans is lower than what many (but not all) conventional loans require. If you have a credit score of about 650 or higher, the low down payment requirement is likely the main reason you'd be considering an FHA loan. As you'll see below, however, there are other low-down-payment options worthy of consideration if this is the case for you.\n*   **Credit score:** The credit score requirement of 580 on FHA loans is lower than what most lenders require for conventional loans. (The vast majority of conventional loans conform to standards set by Fannie Mae and Freddie Mac, which require minimum FICO® Scores☉ of 620.) It's even possible to qualify for an FHA loan with a FICO® Score as low as 500, but you must put down 10% of the purchase price to do so.\n*   **Debt-to-income ratio:** All mortgage lenders look at your debt to income ratio (DTI), the percentage of your monthly pretax income that goes toward debt payments. Lenders view borrowers with high DTIs as posing more financial risk, and they tend to prefer DTIs of 36% or less for conventional mortgages. You can qualify for an FHA loan with a DTI ratio as high as 43%. END