640 Credit Score for FHA, Maybe, Maybe Not

By
Real Estate Mortgage Broker with Movement Mortgage 770-634-4021 NMLS #206275

 

For the longest time, the investors seemed to keep moving up the minimum credit score for an FHA mortgage.  We started at a 580, then 600, then 620 and most lenders now have a minimum requirement of 640.  For the quite some time, it looked like we were headed to a minimum middle credit score of 660.  But that seems to be on the back burner now.  It should be noted, that a borrower with at least a 661 middle credit score will receive the best interest rate as they are not subject to the risk-based pricing.

 

 

 

There are however, some investors that have relaxed some of the credit score requirements and will now accept a lower credit score.  Now, I am not going to imply that these are going to be "easy" to get approved, and most likely the borrower will have to have more than one compensating factors in order to get approved.  But for a borrower that has good work and rental history and has been able to save part if not all of their down payment, this is a terrific option.  A consumer with a lower score can take advantage of still relatively low interest rates, lower purchase prices in most areas and with a good payment history moving forward can rebuild their financial life.

When possible, I recommend to my customers that they do everything possible to get their score as high as possible before they make the purchase, but sometimes, the amount of time it will take works against their time line.

For more information on FHA requirements please contact me or check out www.hud.gov.

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Kathleen Sheehan

Sr. Mortgage Consultant

NMLS #206275
Georgia Residential Mortgage Licensee #25839

1725 Windward Concourse Parkway

Suite 320

Alpharetta, GA  30005

 

770.634.4021 cell

 

 

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The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.

 

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Judi K Barrett
Broker/Owner, Integrity Real Estate Services -IDAB
Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma

I've received word of some credit score requirment reductions from one of the banks here in Oklahoma about a week ago.. 

July 20, 2011 11:18 PM
Rainmaker
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Kathy Sheehan
Movement Mortgage 770-634-4021

There are a few wholesale lenders that have reduced the credit score requirement.  In fact, I closed one last week.

July 21, 2011 10:36 AM
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Connie Harvey
Realtor - Nashville TN Real Estate
Pilkerton Realtors

Kathy, I keep encouraging my buyer clients to continue to work on their credit. They just don't all understand how incredibly important it can be.

July 21, 2011 12:51 PM
Rainmaker
563,774
Kathy Sheehan
Movement Mortgage 770-634-4021

Connie, I agree, but sometimes with the right compensating factors a buyer may not have to wait until they get the score higher.  Besides a 12 month clear mortgage payment history on a credit report will do more to boost their score.

July 21, 2011 04:21 PM
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Kathy Sheehan

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