500 Credit Score: Can I Buy With an FHA Loan? (2026)

Which FHA purchase loans fit a 500 credit score?

What could a 500 score mean for rates and PMI?

Very low scores can limit lender access. Prioritize bringing past-due accounts current and checking errors before paying application costs. We have no verified score-specific rate spread or insurer quote for your file, so none is invented here. Credit models, LTV, debt ratios, occupancy, points and the rate lock can all change pricing.

Freddie Mac describes PMI as roughly $30–$70 monthly per $100,000 borrowed. That is an educational range, not a price band assigned to your 500 score. FHA mortgage insurance follows the HUD loan-amount/LTV schedule rather than a credit-score surcharge.

How does the FHA down-payment rule change at this score?

At 500, HUD’s score rule permits up to 90% LTV, requiring 10% down. For a $350,000 comparison home, cash down is $35,000, the base mortgage is $315,000, and financed upfront MIP is $5,513. At the common market-average rate the initial all-in illustration is $2,762/month. This is a nationally weighted tax/insurance comparison, not a 500-score offer; county FHA limits and lender approval apply.

Rate assumption: 7.18% (Freddie Mac PMMS 30-year fixed average, week of November 5, 2026). Change it in the payment calculator.

The $350,000 comparison price is the supported price step closest to our population-weighted state ACS values, not a measured national home median. Tax is 1.064% yearly, insurance is $1,790/year, the term is 30 years, and annual FHA MIP is 0.50% initially. At 10% down, annual MIP generally lasts 11 years. HOA and other debt are excluded.

What should I improve before a mortgage application?

1. Review your credit reports and dispute inaccurate late payments, balances or accounts with the reporting bureau.
2. Pay every account on time. If an account is past due, discuss how to bring it current before shopping.
3. Reduce revolving balances without taking on replacement debt; ask a loan officer which changes matter to your file.
4. Avoid new credit applications, large financed purchases and closing established accounts immediately before closing.
5. Compare lender overlays in writing. Ask whether the lender actually accepts FHA scores below 580 before paying application fees.

Improvement timing depends on reported information and scoring models. We do not promise a points increase or approve a loan, and are not a lender.