2016 FHA Guidelines

FHA World - 2016 FHA Guidelines

data-custom-mark="true"FHA refinance or purchase minimum credit score of 500.

Generally, a borrower who has made timely payments for the last 12 months serves as a guide and demonstrates their willingness to repay future credit obligations. New FHA policy changes require minimum FICO credit score to be 580 for 96.5% down payment (3.5% down payment). These FICO credit score requirements went into effect in the spring 2010. However, most individual lenders will still require credit scores higher than 640.

A perfect credit score is not needed for an FHA loan approval. In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for a FHA loan than a for a conventional loan. Sometimes score down to 500 are accepted if there are compensating factors that offset the credit risk. 

Credit score below 580 require a larger (10)% down payment on a purchase. On a refinance, the maximum loan-to-value on a rate and term refinance is 80% of the property value. Case by case on a cash-out refinance.

FHA World - FHA CREDIT

FHA Credit - FHA announced a set of policy changes to strengthen the FHA. The changes announced are the latest in a series of changes enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.

The FHA has taken the following step:

• Update the combination of FICO scores and down payments for new borrowers
• New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program
• New borrowers with less than a 580 FICO score will be required to put down at least 10%

FHA World - FHA Credit Requirements

FHA credit requirements have changed. For purchase and refinance you will need a minimum of 580 credit score for 3.50% down payment or 97.0% rate and term refinance or 85.0% cash-out refinance. If your credit score is below 580 then a 10.0% down payment is required for a purchase and a maximum of 90% LTV for a rate and term refinance.

Most lenders require a 640 credit score. There are fewer lenders that will allow 620 credit score and fewer that allow credit score down to 580.

New minimum FHA credit score is 500.

2016 FHA Guidelines

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