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Credit Score Requirements for an FHA Loan in Florida

Services for Real Estate Pros with Climer School of Real Estate

October 28, 2010 11:08 AM

Have you ever wondered what is going on with credit and mortgages in this country? I do everyday, and I'm in the business. If you want an FHA loan in Orlando where I'm from or Florida, you'd better read this and heed carefully.

Government backed mortgages, including and especially FHA, are still the best way for the average American to buy a home.

For the longest time, HUD/FHA had no credit score requirements for their loans. Actually, for a long time, there was no such thing as credit scores. We can thank the Fair, Isaac, and Company for that.

All of a sudden, many lenders and banks began looking at credit scores and credit score levels as a means of pricing their rate products and as a tool for underwriting decisions. Compensating factors began to play a large role with lower credit score files.

When the market started dropping in our current real estate downturn, the lenders and banks began a credit-score threshold on what they would and would not do. HUD/FHA still had no credit score policy but the banks said, ‘we don't care what HUD says, this is what we will do."

It started at a 580 middle score, then rose to 600, then to 620. Some well known banks are at a 640 middle score, and one who shall remain publicly nameless went to a660 middle credit score, even for an FHA loan!

That being said, FHA is still the easiest loan to qualify for. Our buyers have a lower down payment requirement than conventional (3.5% down as opposed to 10 or 20% down), the rates are very competitive with conventional financing, there is only a 2 year waiting period after a Chapter 7 Bankruptcy, and it some cases it is still possible to use alternative credit to supplement the credit report.

There is also a difference between Credit Restoration and Credit Repair. I have found a very good company, and while there are never any guarantees, they have had good results with many of my customers. Check them out at www.ClickHereForGreatCredit.com if you or one of your customers needs some help.

And as always, I am the number one FHA Lender in the state of Florida as well as VA and Rural Development.

I also offer Jumbo Financing up to 80%, non-warrantable Condo's financing up to 80%, and Foreign National Financing up to 65%, In House. That's right, we are a Florida-based, local lender and we appraise locally, and underwrite and close right here.

Give me a call!