Question Details

Scott Lambert,  in California

What Lenders will lend below a 620 Credit Score on an FHA Loan without a interest rate penalty?

Asked by Scott Lambert, California Fri Feb 26, 2010

Help the community by answering this question:


FHA really isn't credit score driven, it's the Banks and Lenders that set those score requirements. There are a few lenders that go down to 580 with FHA, I personally have closed on several homes with clients around and under 600. I recommend all my clients that have credit issues to check with The Lenders Network, check them out. If anyone can get you approved they can!

Good Luck!
5 votes Thank Flag Link Wed Jul 10, 2013
I work for a company name First Direct Lending they work with Fico scores as low as 500. We offer awesome rates and usually pay off debts to help improve the scores. 855-587-3279 Ext 2047 my name is Gabriel
1 vote Thank Flag Link Sat Dec 5, 2015
Good afternoon Scott,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.…

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
1 vote Thank Flag Link Tue Jul 2, 2013
I am state and federally licensed to write mortgages in 31 states for a top direct lender in the mortgage industry who offers conventional, FHA, VA, and USDA loans. We keep your info private not broker it out and we go down to a 550 credit score for VA and FHA loans.. Are lowest score we accept for government loans are 550 when most lenders require a 620 and brokers a 580. You have to have two years of income with a score over 550 with bankruptcies discharge date 2 years and over. We have basic guidelines and a pretty easy process. Feel free to text me or call me anytime up to 10:00pm Eastern with any questions.
Brian Young 214-797-3479
NMLS 902687
0 votes Thank Flag Link Sun Mar 6, 2016
Hello are you licensed in AZ?
Flag Tue Jul 19, 2016
FHA is rate driven depending on credit score.. like any other program. You will have small incremental rate adjustments for any credit score below 720. The lower, the higher the rate.

Five Stars Mortgage
National Home Loan Resource
7 days week - 9am-8pm
Ph: 800-871-2636
0 votes Thank Flag Link Sun Dec 6, 2015
I have a credit score of 636 and my husband is a 605 we have paided off CC but unsure we will get to 620 min score for VA loan is there a Sub 620 Score Lender with good rates available in Idaho. We are unfortunately in the top 2 states with rising house prices and want to get a good deal before they are gone in our state.
0 votes Thank Flag Link Tue Oct 2, 2012
I represent a wholesale bank that does FHA loans down to a 580 FICO. Rates are still very good and as your credit score improves, you can always do a rate reduction streamline refinance to obtain the best rate that you qualify for. Credit scoring, in most loans, has an affect on pricing.

Steve Ragghanti
0 votes Thank Flag Link Wed Sep 22, 2010
hi this guy..(mark)....he is with american financial resources in new jersey...they will go even lower than a 620 and do a manual underwrite and portfolio fha loans....hope that helps...bob mcclure- first preferred mortgage- southfield, michigan...

Mark Leusner
Account Executive

Phone: 6094408699
Fax: 6092286345
0 votes Thank Flag Link Sun Feb 28, 2010
Hi Scott,

You might be able to purchase with seller financing if you have less-than-perfect credit. You also might consider a rent to own or a lease option.

The other thing to be aware of is that a 620 credit score just gets you into a mortgage. This is not the best mortgage product out there, this is a low qualify mortgage product. Therefore, why not work to improve your credit and then get into a good mortgage product. In fact, mortgages get exciting once your score is 720! At a credit score of 749 mortgages get down right fun!

Here are some links that will help you pull your FREE credit report and your FREE score. If you need help reading your credit report, let me know and I can assist you. Take care.

Hannah Fliegel
The Credit Repair Expert

FREE Credit Report

FREE Credit Score
0 votes Thank Flag Link Sun Feb 28, 2010
If you can find a lender willing to provide financing to borrowers with less than a 620 FICO sore your borrowers should expect to pay a premium. Higher points or an offset with a higher rate are standard for challenged borrowers. Take the time to improved their scores and avoid the higher cost.
0 votes Thank Flag Link Sat Feb 27, 2010
Most lenders wills not offer a mortgage where your credit scores are below 620. Some will not offer mortgages to those with credit scores below 640.

While every lender is different, in most cases, you will be charged a penalty if your credit scores are below 660 or 680. As the number of lenders who offer mortgage for thsoe whose credit scores are below 620 are limited, you can expect to pay even higher penalties.

You will be better off to determine what is causing you lower credit scores and work to resolve those issues before applying for a mortgage.
0 votes Thank Flag Link Sat Feb 27, 2010
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