Home Buying in Peoria Homes>Question Details

Angelkat, Home Buyer in Sun City, AZ

What is the current minimum credit score required to purchase via FHA? They changed it a few time in the past year.

Asked by Angelkat, Sun City, AZ Wed Jul 21, 2010

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FHA ironically does not have a minimum credit score requirement. They have talked about implementing one... Most of the actual lenders have "credit overlays" where they require a minimum of 620 FICO. There is in additiona a down paymnet of 3.5% required and you have to meet debt to income ratio's... Please feel free to ask any additional questions!
1 vote Thank Flag Link Wed Jul 21, 2010
The best way to find out what your next step to qualify is to contact a broker for your options. I always refer to: Desert Springs Financial Services. Contact info below.

Mitchell T. Stam
Desert Springs Mortgage & Financial Services, LLC
Phone 623-432-1309 x 101
Fax 623-432-1177
mstam@desertspringsfinancial.com
http://www.desertspringsfinancial.com
NMLS#'s - 310878 & 794445
AZ Mortgage - LO-0915401 & MB-0918874
AZ Insurance - 990990 & 992740
0 votes Thank Flag Link Fri Aug 23, 2013
Hi Angelkat, fresh data on FHA for you.... though keep in mind the difference between theory and practice -- in practice 620 is where things get easiest.... I got two relevant things for you to read -- this is a blog excerpt from Bill Zielinski...

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The FHA is introducing new guidelines on loan to value ratios and the minimum credit score required for FHA borrowers. As detailed in a Mortgagee Letter from the Department of Housing and Urban Development (HUD), the following credit requirements will apply for FHA borrowers, effective October 4, 2010.

* To be eligible for maximum financing, borrowers will need a minimum credit score of 580 or higher.
* Borrowers with a credit score between 500 and 579 will be limited to a loan to value of 90%. A sub 580 FICO credit score borrower will henceforth need to make a 10% minimum down payment on a purchase transaction.
* All borrowers with a credit score below 500 will not be eligible for FHA-insured mortgage financing.

HUD’s newly introduced minimum credit score and loan to value requirements will apply to all single family loan programs, except for Reverse Mortgages (Home Equity Conversion Mortgages) and Hope for Homeowners.

The new credit requirements are not expected to dramatically change the number of FHA mortgage approvals. Most lenders had already imposed a minimum credit score requirement of 640 or higher for FHA borrowers. In limited cases, borrowers with scores between 620 and 639 could still obtain mortgage approval.

Many potential FHA borrowers with scores below 640 who cannot obtain mortgage approval may be left wondering why this is the case if the FHA has established a minimum score of only 580. The explanation for this is that the FHA does not make mortgage loans but rather insures FHA loans made by lenders. Despite the FHA insurance, banks do not have an iron clad protection from loss.

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... rest of that blog at http://seekingalpha.com/article/223956-the-fha-s-new-minimum…


And I wrote a 10 part blog called "Top 10 Credit Myths" which is good..

http://www.trulia.com/blog/monirmamoun/2010/10/top_10_credit_myths
0 votes Thank Flag Link Sat Oct 9, 2010
From the last class I attended you can qualify with a score of 620
0 votes Thank Flag Link Wed Jul 28, 2010
FHA ironically does not have a minimum credit score requirement. They have talked about implementing one... Most of the actual lenders have "credit overlays" where they require a minimum of 620 FICO. There is in additiona a down paymnet of 3.5% required and you have to meet debt to income ratio's... Please feel free to ask any additional questions!
0 votes Thank Flag Link Wed Jul 21, 2010
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