Hi Stacey, I read your question back in December of 2010 which said your husband had a 603 score, and now it's at 580. Did a delinquent account pop up or something new happen? Did credit card balances/utilization increase since then? How has his last 12 months of credit been?
Forest City is an eligible area for USDA financing (barely, the Citgo station looks to be about the where cutoff is), which is actually 100% financing (you can have a down payment, but you can't have both 20% down AND be able to qualify for conforming financing, which for conforming financing you need a 620 score for so you don't meet that, making you OK for USDA). USDA financing does not require a minimum credit score, however you cannot have recent bad credit (past 12 months) and generally all bad debt (collections, charge-offs, judgments, etc.) need to be paid. There are 2 version of USDA financing, "Guaranteed", which is what us mortgage lenders do, and we normally require 620 or 640 credit scores. And "Direct", which is where you apply directly with USDA, and the Direct version does not have any minimum score requirements (your income must be considered low for the Direct version). http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do is the website where you can check if your household income amount is within the eligibility limits and also to find out which areas are eligible. VA financing also has no score requirement and no limitations on where you can buy, but most lenders will be looking for a 600-640 middle score, and of course you need to be an eligible Veteran.
If you are buying further south towards Scranton you would not have USDA as an option, but would have FHA financing as an option, which just requires a 3.5% down for 580+ scores. If you can get his middle score up to a 620 you'd then be eligible for conforming financing.
Also where did you get the scores? If not from a mortgage loan officer, http://www.myfico.com/ or https://www.annualcreditreport.com/ then they very likely are just estimates of what your actual credit scores are.... more
As long as you are a first time homebuyer you qualify for the $8,000 tax credit. The PHFA loan will give you up to $5,000 which is interest free for the first year. When you file your tax return in 2010 you can use the $8,000 tax credit to pay back PHFA. If you don't do this, the money received from PHFA will become an amoritized loan. You can contact me at firstname.lastname@example.org for more information.... more