Mortgage With a 500 Credit Score Now Possible!

Real Estate Agent with Irongate Inc. REALTORS SAL.2006006317

Real Living Mortgage (a division of Wells Fargo Bank) now allows a borrower to get a mortgage with a credit score of as low as 500 on a fixed rate FHA loan. The following criteria applies:

  • Credit Scores 500 to 579 - borrower needs minimum 10% down payment. 
  • Credit Scores 580 to 599 - borrower needs minimum 5% down payment.
  • Credit Scores 600 and up - borrower needs the normal minimum 3.5% down payment. 
  • Low Debt to Income Ratios - 31% for housing debt and 36% for total debt.
  • Proof of 2 full months of housing payments (mortgage, taxes, and insurance) are required (cash in bank account after paying down payment and closing costs).
  • Seller contributions may not exceed 3% of the purchase price for any borrower with a score less than 600.
  • Gift funds are not allowed to count toward the down payment requirement for any borrower with a score less than 600.

Contact Christina today for more details!

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Blog article provided by Christina Cavins, a Nationally recognized Realtor with Irongate Inc. Realtors. Christina can be reached via email at or by cell phone or text message at 1-937-205-4741. For Ohio real estate and homes see Ohio Real Estate.


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Jerri McCombs, Broker
Dogwood Real Estate Services - Hendersonville, NC
Hendersonville NC Relocation

This is great! Maybe it can get a few more homes sold, but hopefully without the risks of the past. Is this the start of a new path down or up? It is hard to tell these days. 

Feb 08, 2011 12:28 AM #1
Caroline DeVore, Stowe Vermont Lodging, VT Bed and Breakfast Inn, Vacation Homes
Stowe Meadows Lodge, Stowe VT Romantic and Luxurious Inn - Stowe, VT
Caroline DeVore | Stowe Meadows Lodge, Stowe VT

Hi Christina, Thanks for posting.  I also saw an email on this a few weeks ago so I ran it by a lender I often use.  She sent me this response:

"To my knowledge, FHA has always allowed that.  They also allow maximum financing down to a 580 credit score.  However, the problem is no investors will purchase these loans even though FHA will insure them.  All investors now have a 640 minimum credit score overlay."

I'll be interested to see what others post.  




Feb 08, 2011 12:48 AM #2
Christina Cavins
Irongate Inc. REALTORS - Centerville, OH Search Ohio Homes For Sale

Jerri, I think the trouble borrowers ran into previously was with adjustable rate mortgage, so there is no danger of that here.

Caroline, No lenders in this area offered mortgages for borrowers with a credit score below 600 until January when Real Living Mortgage lowered their requirements to a 500 credit score.

Feb 08, 2011 05:17 AM #3
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