Yes you read the title correctly we now have FHA Minimum Credit Scores. For as long as I have been a Loan Officer, FHA has not had minimum credit score requirements, but as of October 4, 2010 that will change, FHA will implement minimum credit scores for all case numbers as
signed on or after October 4, 2010.
For most Lenders this change will not change anything, because many Lenders and Investors have implemented their own credit score limits on FHA Loans already. Most Lenders in Connecticut are requiring a minimum credit score of 620 on FHA Loans. So this change will not have much of an impact on regular FHA Loans here in Connecticut. However, it will have a HUGE impact on Loan Programs like our Connecticut Housing Finance Authority (CHFA) Loan Program.
CHFA is a quasi government agency that subsidizes Loans/Mortgages for First Time Homebuyers. CHFA Loans are backed by FHA, but CHFA is the Investor and they follow FHA Guidelines when it comes to minimum credit scores. Since FHA up until now did not have a minimum credit score, CHFA would do the loan as long as the Borrower met all other CHFA Loan Program Guidelines. It was not unusual to see CHFA Loans approved with credit scores around 550. With this new change all CHFA Loans/Mortgages insured by FHA will now have to meet the new FHA Minimum Credit Scores.
Fannie Mae, also has some new changes, and I will post them in my next blog, so stay tune.
******************************************************************************************************************
Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308, gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.
Comments(23)