The short answer
FHA's own rules allow it: a score of 580 or higher for 3.5% down, and 500 to 579 with 10% down. What stops most people is not that rule. It is the automated review sending the file to a person, and lenders that set their own higher minimums.
Three different gates
People often hear "no" and assume it is about the score. There are three separate things that can say no.
| Gate | What it looks at | If it says no |
|---|---|---|
| FHA's score rule | Your deciding score against 500 and 580 | Under 580 means 10% down. FHA's table starts at 500. |
| FHA's automated system | The whole file: score, debts, savings, payment history | It returns "refer". A person reviews the file under tighter limits. |
| The lender's own rules | Whatever that lender chooses | That lender will not do the loan. Another may. |
Why files with these scores often come back "refer"
The automated system weighs everything together. A lower score with recent late payments, little savings or high debts is more likely to be referred. HUD does not publish the scoring, so nobody can tell you the exact reason from outside.
A refer is not a denial. It moves the file to manual underwriting, where the limits are written down:
- Under 580: a house payment of no more than 31% of income and total debts of no more than 43%.
- 580 and above: the same, or higher with documented strengths such as savings.
- One month of house payments left in savings after closing, for a one- or two-unit home.
- Twelve months of housing payment history verified.
What tends to help
- Twelve months of rent paid on time, in a way that can be proven.
- Savings left over after the down payment and closing costs.
- Lower monthly debts before you apply.
- A larger down payment, if you have it.
None of these is a promise of approval. They are the things a manual review is allowed to count.
What I see in real files
Jamal's own words go here: two to four sentences on what he sees in real files like this. Claude does not write this part.
Questions people ask next
Which of my scores counts?
The middle of three, or the lower of two. With two borrowers, the lower borrower's. How the deciding score is picked
Should I wait and raise my score first?
It depends on how far you are from 580 and what is on the report. That is worth a conversation before you decide.
One lender said no. Am I done?
Not necessarily. Ask whether it was FHA's rule or the lender's own.