Housing Counselor Certification (HUD) Practice Exam

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Prepare for the HUD Housing Counselor Certification Exam with comprehensive flashcards and multiple choice questions that offer hints and detailed explanations. Get ready to excel!

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What is the minimum qualifying credit score for an FHA mortgage if the client makes a 3.5% down payment?

The correct answer is: 580

A minimum qualifying credit score of 580 is established by the Federal Housing Administration (FHA) for borrowers who want to make a down payment of 3.5% on an FHA-insured mortgage. This lower credit score requirement is one of the appealing features of FHA loans, as it provides opportunities for individuals with less-than-perfect credit to access home financing. While a higher credit score can lead to better loan terms and lower interest rates, the 580 threshold allows a broader segment of potential homeowners, including first-time buyers and those recovering from financial setbacks, to qualify for a mortgage. Thus, making a down payment of 3.5% distinctly aligns with the 580 minimum credit score requirement for FHA loans.