I have a credit score of 509 due to a divorce. Is there any way to get a mortgage with this kind of score.?

Asked by Trace, Statesboro, GA Tue Mar 2, 2010

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Monir Mamoun, Agent, Denville, NJ
Sat Oct 9, 2010
Hi Trace, yes, barely :) -- you need to be able to put 10% down to keep things simple with an FHA loan.

I got two relevant things for you to read -- this is a blog excerpt from Bill Zielinski...


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.

... 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..

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Anna M Brocco, Agent, Williston Park, NY
Tue Mar 2, 2010
FHA loans require a minimum credit score of 620 and 3.5% down--some lenders will allow 580 with 10% down, however, the interest rate is higher--work on improving your score---pay off old debt, pay down debt, have credit card balance(s) below 50%, remove any deragatory items if applicable, pay bills on time etc.,
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