Life doesn’t always go according to plan. Medical bills pile up. Divorce happens. You lose a job. Suddenly your credit score doesn’t look like it used to.
That doesn’t mean you can’t buy a home.
FHA loans exist specifically to help buyers with imperfect credit become homeowners. These government-backed mortgages accept lower credit scores than conventional loans. If you’re 50 or older in Las Vegas and worried your credit history will block you from buying, FHA loans might be your answer.
What Makes FHA Loans Different
The Federal Housing Administration doesn’t make loans directly. Instead, the FHA insures mortgages made by approved lenders. That insurance protects the lender if you default. Because of this protection, lenders can offer more flexible qualifying requirements.
FHA loans appeal to buyers who don’t fit the conventional lending box. Maybe your credit score dropped after a rough period. Maybe you have a bankruptcy or foreclosure in your past. Maybe you just never built strong credit in the first place.
The numbers tell the story. In 2016, the average credit score for an FHA homebuyer was around 686. Compare that to conventional homebuyers, who averaged around 753. That’s a 67-point difference. Those 67 points represent the gap between qualifying and being rejected.
Minimum Credit Score Requirements
FHA loans set clear credit score thresholds.
580 or Higher
You need a credit score of 580 or higher to get an FHA mortgage with a down payment as low as 3.5%. This is the standard FHA path. Most FHA borrowers fall into this category.
500 to 579
If your credit score sits between 500 and 579, you need to make a down payment of at least 10% to get an FHA mortgage. There’s a catch here. The FHA will insure the loan, but you still need to find a lender willing to approve it. Many lenders set their own internal minimums above 500, often at 580 or higher. So while FHA technically allows 500-579 scores with 10% down, finding a willing lender gets harder.
Below 500
FHA doesn’t insure mortgages for borrowers with scores below 500. You’ll need to work on rebuilding credit before FHA becomes an option.
Why Your Credit Score Matters Less with FHA
FHA looks at the complete picture, not just your credit score.
Compensating factors can offset a lower score. These include:
- Stable employment history showing you can hold a job
- Consistent income that covers the mortgage payment comfortably
- Low debt-to-income ratio leaving room for housing costs
- Cash reserves beyond the down payment and closing costs
- Minimal new credit applications in the past year
If you’ve had credit problems in the past but you’ve stabilized your finances, FHA loans give you a path forward. The key word? Stabilized. Lenders want to see that whatever caused your credit issues is behind you.
Common Credit Problems FHA Loans Can Overcome
Medical Debt
Medical bills are the leading cause of personal bankruptcy. If you’re 50 or older, you’ve likely faced significant medical expenses at some point. FHA lenders understand this reality. Medical collections on your credit report don’t automatically disqualify you.
Divorce
Divorce wrecks finances. Legal fees, splitting assets, potentially supporting two households instead of one. Credit scores often drop during and after divorce. FHA loans give you a way to move forward and establish your independent housing situation.
Foreclosure or Bankruptcy
Both will damage your credit score. But neither blocks you from FHA loans forever. You’ll need to wait a specific period after discharge or completion. For Chapter 7 bankruptcy, that’s typically two years. For foreclosure, it’s three years. Compare that to conventional loans, which often require four to seven years.
Late Payments
A pattern of late payments hurts your score. But if the late payments happened during a specific difficult period and you’ve since established consistent on-time payment, FHA lenders will consider your recent history more heavily than older problems.
High Credit Utilization
Maxing out credit cards drops your score quickly. If you’ve been carrying high balances but making payments, FHA can work. Ideally, pay down balances below 30% of credit limits before applying. If you can’t, demonstrate that you’re managing the debt responsibly.
FHA Down Payment Requirements
FHA loans require 3.5% down minimum with a credit score of 580 or higher. On a $300,000 home, that’s $10,500. Compare that to conventional loans often requiring 5% to 10% down for borrowers with similar credit profiles.
If your score falls between 500 and 579, you’ll need 10% down. That’s $30,000 on a $300,000 home. The bigger down payment partially offsets the higher risk of a lower credit score.
The down payment can come from savings, gifts from family, or down payment assistance programs. You don’t have to have saved every dollar yourself.
Mortgage Insurance on FHA Loans
FHA loans require two types of mortgage insurance.
Upfront Mortgage Insurance Premium (UFMIP)
You’ll pay 1.75% of the loan amount upfront at closing. On a $300,000 loan, that’s $5,250. Most borrowers roll this into the loan amount rather than paying cash at closing.
Annual Mortgage Insurance Premium (MIP)
You’ll also pay annual mortgage insurance, divided into monthly payments. The amount depends on your loan amount, down payment, and loan term. For most borrowers putting down 3.5%, expect to pay about 0.55% to 0.85% annually.
On a $300,000 loan, that’s roughly $138 to $213 per month.
Here’s the part that frustrates some borrowers: FHA mortgage insurance doesn’t drop off like PMI on conventional loans. For loans with less than 10% down (which includes most FHA buyers), MIP lasts for the life of the loan. Your only way to eliminate it is to refinance into a conventional loan once you have 20% equity and your credit has improved.
For loans with 10% or more down, MIP drops off after 11 years.
The Real Cost of FHA Loans
Let’s compare two scenarios for a Las Vegas buyer with a 620 credit score.
FHA Loan
- Purchase price: $300,000
- Down payment (3.5%): $10,500
- Loan amount: $289,500
- Interest rate: 6.5% (example rate for 620 credit)
- Monthly P&I: $1,830
- Monthly MIP: $150
- Total monthly payment (P&I + MIP): $1,980
Conventional Loan
- Purchase price: $300,000
- Down payment (5% required for 620 credit): $15,000
- Loan amount: $285,000
- Interest rate: 6.75% (example rate for 620 credit)
- Monthly P&I: $1,849
- Monthly PMI: $142
- Total monthly payment (P&I + PMI): $1,991
The payments are nearly identical. But FHA requires $4,500 less upfront ($10,500 vs. $15,000). If you’re short on cash for down payment but your income supports the monthly payment, FHA makes more sense.
When FHA Loans Make Sense for Las Vegas Buyers 50+
You’re Rebuilding After a Life Event
Divorce, medical crisis, or job loss knocked your credit down. You’ve stabilized your situation but your score hasn’t fully recovered. FHA gives you a path to homeownership during the recovery period.
You Have Limited Savings for Down Payment
At 50+, you might have had less time to accumulate savings than you’d like. FHA’s 3.5% minimum opens doors that conventional lending keeps closed.
You’re Moving from Expensive Areas
If you’re relocating to Las Vegas from California or another high-cost area, you might be selling a home with equity but arriving with a credit score damaged by the high cost of living in your previous location. FHA lets you transition into Las Vegas homeownership while your credit rebuilds.
You Want to Stop Renting Before Retirement
Renting on a fixed retirement income feels precarious. Even with FHA’s mortgage insurance costs, owning provides stability rent can’t match. Your payment stays consistent (on a fixed-rate mortgage). Rent only goes up.
You’re Established in Your Career with Stable Income
If you’re in your 50s with decades of work history, stable income, and just happen to have a lower credit score, FHA recognizes the value of that employment stability. Your work history compensates for the credit score.
How to Prepare for an FHA Loan
Check Your Credit Report
Get your free credit report from all three bureaus. Look for errors. Dispute anything inaccurate. Errors on credit reports are common. Fixing them can boost your score quickly.
Pay Down Debt
If possible, pay down credit card balances below 30% of credit limits. This improves your credit utilization ratio, which affects your score.
Stop Opening New Credit
Every new credit application dings your score slightly and adds to your total debt obligations. Stop applying for new cards, car loans, or other credit in the months before applying for a mortgage.
Build Your Reserves
Save beyond your down payment. Lenders want to see reserves, which are cash or liquid assets you’ll have after closing. Even two or three months of reserves strengthens your application.
Document Your Income
Gather pay stubs, W-2s, tax returns, and bank statements. Self-employed borrowers need two years of tax returns and profit-and-loss statements. The more documentation you provide, the clearer your financial picture.
Get Pre-Approved
Work with an FHA-approved lender who understands the Las Vegas market. Pre-approval tells you exactly what you can afford and shows sellers you’re serious. Aaron Taylor “The Real Estate Guy” can connect you with lenders who specialize in FHA loans for buyers at this stage of life.
FHA Loan Limits in Las Vegas
FHA sets maximum loan amounts by county. These limits change annually.
In Clark County (which includes Las Vegas, Henderson, and North Las Vegas), the FHA loan limit for a single-family home in 2026 is determined by the property’s conforming loan limit. Check current limits with your lender, as they adjust based on median home prices.
If you’re looking at homes above the FHA limit, you’ll need a conventional loan or a jumbo loan. For most Las Vegas buyers, FHA limits are high enough to cover typical home prices in the area.
What FHA Loans Don’t Fix
FHA loans help with credit scores, but they can’t solve every problem.
Insufficient Income
If your income doesn’t support the mortgage payment, no loan program will approve you. FHA requires that your total debt obligations (including the new mortgage) stay below 43% to 50% of gross income, depending on other factors.
Active Bankruptcies
You must have discharged bankruptcy before applying. FHA won’t approve loans for borrowers still in active bankruptcy proceedings.
Unpaid Tax Liens
Federal tax liens must be resolved before FHA will approve your loan. Work with the IRS to set up a payment plan or resolve the lien.
Recent Foreclosures
The three-year waiting period after foreclosure is firm. No exceptions.
Unstable Employment
FHA wants to see at least two years of consistent employment. Frequent job changes or gaps in employment make approval harder.
Moving Forward with FHA
If you’re 50 or older in Las Vegas with less-than-perfect credit, FHA loans offer a real path to homeownership. Your credit score doesn’t define your ability to own a home. It’s one factor among many.
Start by understanding where you stand. Check your credit score. Calculate your debt-to-income ratio. Determine how much you can save for a down payment.
Then connect with an FHA-approved lender who can evaluate your complete situation. They’ll tell you whether you qualify now or what you need to improve first.
Don’t let past financial problems block you from homeownership permanently. FHA loans exist because lawmakers understood that life happens to responsible people. Credit scores recover. Financial situations stabilize. You deserve a path forward.
Frequently Asked Questions
What credit score do I need for an FHA loan in Las Vegas?
Minimum 580 for 3.5% down, or 500-579 for 10% down. The average FHA borrower has a score around 686. Higher scores qualify for better interest rates. Below 500, you’ll need to rebuild credit before FHA becomes an option. Individual lenders may set higher internal minimums, often around 580.
Can I get an FHA loan with a bankruptcy on my record?
Yes, but you must wait two years after Chapter 7 bankruptcy discharge or one year after Chapter 13 if you’ve made all payments on time. The bankruptcy can’t be active. You’ll need to demonstrate stable finances and explain what caused the bankruptcy and how you’ve prevented recurrence.
Will medical debt on my credit report disqualify me from an FHA loan?
No. Medical debt is treated differently than other types of debt. FHA lenders understand that medical emergencies create unavoidable expenses. As long as you’re making payment arrangements or the debt is otherwise being handled responsibly, medical collections won’t automatically disqualify you.
How much down payment do I need for an FHA loan?
3.5% minimum if your credit score is 580 or higher. 10% minimum if your score is between 500 and 579. On a $300,000 home, that’s either $10,500 or $30,000. The down payment can come from savings, family gifts, or down payment assistance programs.
Can I use FHA if this isn’t my first home?
Yes. FHA loans aren’t limited to first-time buyers. You can use FHA financing for your second, third, or tenth home purchase. The main requirement is that the home must be your primary residence, not an investment property or vacation home.
How long does FHA mortgage insurance last?
For loans with less than 10% down, mortgage insurance lasts for the life of the loan. For loans with 10% or more down, it drops off after 11 years. The only way to eliminate it on a 3.5% down loan is to refinance into a conventional loan once you have 20% equity and improved credit.
What’s the difference between FHA and conventional loans for someone with a 650 credit score?
With a 650 score, you qualify for both. FHA requires 3.5% down versus 5% for conventional. FHA mortgage insurance lasts longer but upfront costs may be lower. Interest rates vary by lender. Compare offers for both loan types. Your specific situation determines which costs less over time.
Can I refinance from FHA to conventional to eliminate mortgage insurance?
Yes. This is called an FHA-to-conventional refinance. You’ll need 20% equity and a credit score typically above 620 (higher is better). Your credit must have improved since your original FHA loan. Many borrowers do this after a few years of on-time payments and appreciation build equity.
Will getting an FHA loan hurt my credit score?
The mortgage application will cause a small temporary dip (usually 5-10 points) from the credit inquiry. But making on-time mortgage payments builds credit over time. An FHA loan can actually help repair credit if you manage it responsibly. Payment history is the biggest factor in credit scores.
Are there income limits for FHA loans?
No. FHA doesn’t set income limits. Your income must be sufficient to support the mortgage payment and your other debts, but there’s no maximum income threshold. Some down payment assistance programs used with FHA loans may have income limits, but the FHA loan itself doesn’t.
Key Takeaways
- FHA loans accept credit scores as low as 580 for 3.5% down, making homeownership accessible for buyers with imperfect credit
- The average FHA borrower has a credit score around 686 versus 753 for conventional buyers
- Medical debt, divorce, and past bankruptcies don’t automatically disqualify you from FHA loans
- FHA requires only 3.5% down compared to 5-10% for conventional loans with similar credit profiles
- Mortgage insurance lasts for the life of loans with less than 10% down, but can be eliminated by refinancing later
- Compensating factors like stable employment, low debt ratios, and cash reserves can offset lower credit scores
- Wait periods apply after bankruptcy (2 years) and foreclosure (3 years) before FHA approval
- FHA loans aren’t just for first-time buyers and work for any age group buying a primary residence
- At age 50+, FHA provides a path to stop renting and build equity even if credit isn’t perfect
- Work with FHA-approved lenders who understand Las Vegas market conditions and programs for mature buyers
