Minimum Credit Score Requirements For FHA Loans 2014

Mortgage and Lending with Equity Resources NMLS 67179 Licensed in NC

We often talk to first time home buyers who want to know the minimum credit score requirements for a mortgage in North Carolina.  The answer, while not complicated, is not one where I can just spit out ONE number as a benchmark for all mortgage programs.  I can pretty easily say, however, that from a CREDIT SCORE ONLY perspective - Minimum Credit Score Requirements For FHA Loans 2014 are probably the most "forgiving."

The minimum credit score requirements for a mortgage depends on which type of program you are applying for, what type of housing you are purchasing, and what down payment you will be making.

Minimum Credit Score Requirements for FHA Loans:

Minimum Credit Score Requirements for FHA LoansFHA Loans are often considered First Time Home Buyer loans, although you do NOT have to be a first time home buyer to qualify for the loan.

The minimum down payment for a FHA Loan is 3.5% and the FHA monthly PMI is 1.35%. No matter what your credit score is - you can will get today's best mortgage rate for a FHA loan, and your PMI factor will not change.

With FHA Loans, you can have a non-owner occupied borrower added to the loan – however the co-signor does not offset bad credit, so the person who is living in the house needs good credit.

FHA Loans can also help in situations where one spouse has good credit and the other spouse has all of the income.

While not all banks will do this, our Bank will make FHA Loans for Folks with minimum credit scores between 580 and 619. If you have excellent offsetting, compensating factors, like extra funds left over after closing, and very low debt to income ratios, you can get a FHA loan with minimum credit scores below 620.

The maximum debt to income ratio for FHA Loans with scores between 580 and 619 is 43.0000%. For folks with this credit score profile, the Down Payment can NOT be a gift.

For MOST people, the Minimum credit score requirements for FHA Loans is 620. For these folks, you don't need as many compensating factors. Maybe you have some unpaid medical collections on your credit report, or you are getting Gift Funds for your down payment – then the next minimum credit score we will try to get you approved at is 620.

The FHA Loan Automated Underwriting system is set to approve loans with a minimum credit score of 640. Those with scores below 640 will sometimes get an automatic approval through the system - but usually those will be Manual Underwrites, meaning you will have more documentation requirements.

FHA Home loans have a 24 month waiting period for most Bankruptcy situations – however those that involved a foreclosure have a waiting period of 36 months.

It's important to remember that your credit score is just a snapshot of what your credit looks like at a given moment. What I'm trying to say is - If you don't currently have the credit scores you need to buy a home in NC don't give up. ANYONE can increase their scores to be able to buy a home, and normally we can help someone do that in as little time as just a couple of months.

If you have questions about minimum credit score requirements for a mortgage, or want to know ways that you can RAISE your credit scores, you might want to read the section on this page about: If you have a credit score of 600, or higher here are the steps we suggest you take NOW.

Need specific information about your situation and Minimum Credit Score Requirements for a Mortgage, call Steve and Eleanor Thorne 919 649 5058.; We work with people in NC every month who thought they would never be able to buy a house, and found that it was much easier than they thought!

Originally Posted at


Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Alliance Realty Group LLC 12/17/2013 06:22 AM
  2. Lori Cain 12/18/2013 01:46 AM
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Don Taber
Our Town Properties, Inc., Wilson, NC - Wilson, NC


Thanks for the info.  Keeping up with the guidelines is always a good thing.

Dec 17, 2013 05:40 AM #1
Catherine Ulrey
Keller Williams Capital City - Salem, OR
Equestrian and Acreage Property Specialist

Hey, that's good to know, thanks!

Dec 17, 2013 06:06 AM #2
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

620 is the magic number it seems.  We use the same benchmark to approve our applicants that want to rent from us.  

Dec 17, 2013 06:14 AM #3
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Eleanor, that's a great synopsis of the 2014 FHA process. I'll definitely bookmark this one for use with clients. Good show!

Dec 17, 2013 06:37 AM #4
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Hi Eleanor - Long time no talk. This was a great, concise explanation of the FHA lending requirements. Well done!

Dec 17, 2013 06:50 AM #5
Tim Carver
Layton, UT

Hi Eleanor!

I'm a newbie real estate agent so this was helpful! 



Dec 17, 2013 06:52 AM #6
Rosie Moore
Serving Sugar Land, Richmond, Rosenberg, Missouri City - Sugar Land, TX

Thanks for posting this information.  Unlike FHA and VA loans, conventional loans require a higher minimum credit score to qualify.

Dec 17, 2013 07:38 AM #7
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Eleanor - an excellent post explaining the FHA loan and credit scores.  I will need information like this for many buyers I will be working with in the new year.

Dec 17, 2013 07:57 AM #8
Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

Well written blog breaking down the FHA Requirements. Very useful information for real estate agents to provide to some FHA Home buyers. Thanks for sharing.

Dec 17, 2013 08:16 AM #9
Eleanor Thorne
Equity Resources - Cary, NC
Equity Resources 919-649-5058

Thanks very much for all of the Support!  The FHA Loan is the easiest mortgage loan to qualify for if you have some "Skeletons in your credit closet" however there are restrictions and hoops that you have to jump through :)

Dec 17, 2013 08:58 AM #10
Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     Good information, Eleanor.  FHA Loans have some drawbacks (including lifetime MIP), but they are the go-to loan for people with low money down and lower credit scores.

Dec 17, 2013 10:28 AM #11
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Thanks. We only go to 640 and we are  a credition. I think if someone can broker they can go down to 580 although I know the underwriting is tighter. Thanks again!

Dec 17, 2013 11:04 AM #12
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

I meant to say credit union. My thoughts ran together. Lol!

Dec 17, 2013 11:05 AM #13
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher
It could be worse think. But let's hope for a great 2014. Love and light, Laura
Dec 17, 2013 01:35 PM #14
Andrew Mooers | 207.532.6573
Northern Maine Real Estate-Aroostook County Broker

Fixing the scores, adjusting the debt load and getting ready to buy a home, any type of property means pre-approval. And knowing the numbers on your batting average and chances of swinging a place, hitting a "home" run. Otherwise stay on the bench until you can crack the bat at a chance for a set of keys. Great post to explain the process, behind the scenes how it works. Banks want to make, need to do loans. Lots of them. Not the bad guys.

Dec 17, 2013 06:48 PM #15
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

The first thing I do is insist buyers speak with a lender. There are just so many factors going into credit scores, rates charged, etc. these days, there's no easy answer for the majority. And as a Realtor I sure can't keep up with all of them.

Dec 17, 2013 08:22 PM #16
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

Eleanor, an excellent explanation for all borrowers to read and digest...thank you so much for sharing well!

Dec 17, 2013 08:24 PM #17
Aaron Hofmann
Atlanta Communities - Smyrna, GA
aka Mr. Smyrna Vinings

Prepare well in advance, talk to a recommended lender and lay the groundwork now for a smooth transaction.

Dec 18, 2013 04:10 AM #18
Marc McMaster
RE/MAX Centre Realty - State College, PA
Putting my clients before myself

All good information, thanks for posting this.  This will come in very handy. 

Dec 18, 2013 05:01 AM #19
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Eleanor, I just stopped by to wish you a Merry Christmas!

Dec 24, 2013 07:05 AM #20
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Eleanor Thorne

Equity Resources 919-649-5058
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