What is the credit score requirement for FHA Title 1 home improvement loans?

A Title 1 program issues FHA home improvement loan guarantees. These loans are provided by private lenders, but they are guaranteed through the Federal Housing Administration, meaning the FHA will purchase the loan out of default if the borrower can no longer pay. Since the FHA is taking on a large risk through this guarantee, it sets a high credit score requirement, typically over 700.

Securing a High Score

A score over 700 means the borrower has very few if any missed payments within the previous two years. It also means the borrower has an overall low amount of debt compared to available credit. For example, the individual is likely using only 10 percent of his or her available credit card limit. The 700 or higher borrower has no defaults or bankruptcies within recent history.

Securing a Low Credit FHA Loan

If your credit does not meet the minimum requirement, you should have credit very close to the 700 range. You should have had no bankruptcies or defaults within the previous 5 years. If you owe the federal government any money, through loans or taxes, your payments should be current. You may still qualify for a loan if your score is very close to 700 with only a few minor problems holding you back.


For more information, read Title 1 FHA Home Improvement Loans Explained.