FHA 2017 Minimum Credit Score 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 Federal Housing Administration insures FHA loans and did not used to require a minimum credit score. The new FHA policy changes requires a minimum credit score of 580 for 3.5% down payment and anyone purchasing a home with a score lower than 580 will require 10% down payment.
The FHA has taken the following step:
Borrowers with a prior bankruptcy, foreclosure, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the bankruptcy, foreclosure, deed-in-lieu, short sale was the result of a documented extenuating circumstance.
Borrowers may also be eligible for an FHA insured loan on a purchase transaction after 12 months from the completion, discharge, trustee's sale if the borrower meets the requirements for extenuating circumstances Economic Event.
A few key items for borrowers applying under the enhanced guidelines:
To be eligible for these enhancements, borrowers must have experienced a minimum of 20% reduction to the household income for duration of at least six (6) months. Written VOE’s from previous employers and tax returns will be required for all household members; this can require verifying prior income and employment for individuals not on the new transaction.
Household income is defined as all parties on the prior Note/Deed of foreclosed property even if they are not on the new transaction. If there was no prior mortgage/foreclosure, then the guidelines are applied to the borrowers of the current loan. Borrowers must have a satisfactory credit history prior to the Economic Event. Borrowers with habitual late pays, disregard for credit, mismanagement are not eligible for these enhancements.
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FHA 2017 Minimum Credit Score, FHA 2017 Minimum Credit Score
Aug 05, 24 04:10 PM
Aug 05, 24 03:55 PM
Aug 05, 24 03:48 PM
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Minimum Credit Score Needed
to Buy a Home
FHA
Requires a minimum credit score of 500 to buy a home
VA
Requires a minimum credit score of 500 to buy a home
Fannie Mae
Requires a minimum credit score of 620 to buy a home
Freddie Mac
Requires a minimum credit score of 620 to buy a home
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