What credit score do I need for an FHA loan in Wisconsin?
Rob Miller details the minimum credit score requirements for getting an FHA loan in Wisconsin, including 3.5% down vs. 10% down rules.
Rob Miller, Branch Manager at MadCity Home Loans, answers one of the most common qualification questions we get from Wisconsin buyers.
What credit score do I need for an FHA loan in Wisconsin?
FHA loans are one of the most powerful tools we have for helping Wisconsin families buy homes, specifically because they are much more forgiving when it comes to credit history than conventional loans.
If you are wondering if your score is high enough, here are the official rules—and how they actually apply in the real world:
- 580 or Higher (The Magic Number): If your credit score is 580 or above, you qualify for the maximum FHA financing, which means you only need a 3.5% down payment. For example, on a $300,000 home, your down payment would be just $10,500.
- 500 to 579: Technically, you can still get an FHA loan with a score in this range. However, the rules change: you will be required to put down a minimum of 10% instead of 3.5%. So for that same $300,000 home, you would need $30,000 down.
- Under 500: At this point, you are not eligible for FHA financing. However, do not give up. We have a dedicated credit repair team that helps buyers safely and legally raise their scores over the 580 mark so they can qualify.
The "Overlays" Trap to Watch Out For
Here is an insider secret you need to know: Many big national banks and online lenders have what are called "overlays." An overlay is a rule the bank creates that is stricter than the actual FHA guidelines.
For example, the government says you only need a 580 for an FHA loan. But a big bank might say, "We only do FHA loans for scores 640 and above." If your score is 610, they will deny you and tell you that you don't qualify for an FHA loan. That is completely false—you just don't qualify with them.
At MadCity Home Loans, we are an independent mortgage broker. We do not have those restrictive overlays. If the FHA says 580 is good enough, then it is good enough for us.
Related Guide: Want to know exactly what we look for when approving a loan? Read our complete Mortgage Pre-Approval Guide for a full breakdown of income, credit, and asset requirements.