FHA Bad Credit

FHA Purchase Guidelines

On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers.

• FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment
• Borrowers with less than a 580-credit score will be required to put down at least 10%
• Minimum 500 credit score

This has allowed the FHA to better balance its risk and continue to provide financing for home buyers.

FHA Refinance Guidelines

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 credit score to be 580 for 97.75% loan-to-value and anyone refinancing with a score lower than 580 will require 90% loan-to-value.

Cash-out refinance

New borrowers will be required to have a minimum credit score of 500 to qualify for FHA’s 80% loan-to-value cash out.