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FHA New Minimum Credit Score? It is True?

I heard from a lender today that FHA come down with a new rule saying that from now on borrowers must have minimum credit score of 620., is this true? Please advise.

This will devastatea lot of first time home buyer with not so good passed credit history, not to count that will make FHA less competitive.

Bill Arce

Posted by Real Estate Latino (Bill Arce) on 02/18/2009 01:59 PM

Comments (8)

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8 Comments on FHA New Minimum Credit Score? It is True?

FEB

I hope not. I know we need a minimum but 620 is not it

I wish we had this in the first place. I don't think personally 620 is that high. Maybe if they put at least 10% down this could be changed.

We need tighter DTI's not higher credit scores in this market!

Well here are some of the new guidelines coming down the pipe.

For all FHA and VA loans the minimum FICO score required is 620. This also applies to streamline refinance.
The VA lending programs will no longer allow for Non-Traditional Credit.
The VA lending program maximum debt ratio of 41% now applies to all transactions.
The FHA standard lending program will now limit the Cash-Out Refinance LTV to 85%. The 95% LTV with credit overlays is no longer available.
Buydowns are no longer permitted for all FHA and VA programs.

De madre.....

Bill Arce

www.realestalatino.com

We have a had a minimum imposed on most of our lending products in Canada for some time now. It is probably one of the key reasons we do not have a foreclosure problem.

FEB

Haven't heard about FHA but here's a release from a report yesterday about the other GSE's: Beginning April 1, Fannie Mae and Freddie Mac will increase mandatory fees and toughen credit-score and down-payment rules. Under the new guidelines, applicants will be charged more for down payments of less than 30 percent. Home buyers with FICO scores between 700 and 720 will pay an extra three-quarters of a point. Applicants who purchase a condominium and do not have a 25 percent down payment also will pay a three-quarter point add-on penalty, regardless of their FICO score, for purchasing a condominium instead of a single-family home.

That sounds like a real buyer stimulus don't you think?

MAR

Yes the current minimum for FHA is 620 and that is with 20% down. I just applied last Thursday and that is what I was told.

MAR

Gene, you are right, with FHA and Convectional program getting harder to get it sure we are not going to stimulate the real estate market. Bill www.realestatelatino.com

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