FHA Loans: Credit References

October 2, 2012

It would be easy to assume that a borrower with little credit history, or non-traditional credit history, is not eligible for an FHA guaranteed mortgage. But this isn’t necessarily true–the FHA has a set of requirements for those with little credit history or non-traditional credit.

In typical FHA loan cases, the borrower would submit credit card information, plus details on any student loans, car payments, rent, or other financial obligations.

Borrowers who have alternative credit references can still apply and be considered for an FHA mortgage, thanks to a set of requirements for credit references that might be considered non-traditional. Borrowers should not give up on pursuing an FHA home loan just because they don’t have typical credit–as you’ll read below, there is much more that can be used on the FHA loan application for underwriting purposes.

The FHA loan rules, spelled out in HUD 4155.1 Chapter One say;