October 6, 2015
A reader asked us a question about FHA loan FICO score requirements in the comments section recently, saying, “Im a first time home buyer and my credit score is 599 to 620 avg. from all 3 bureaus. All my credit cards are paid on time never been late. I dont have any negative accounts on my credit report. Do I have a chance of being approved?”
There are two important issues to address with this reader’s question. The first is the reader’s status as a first-time home buyer. The FHA loan program itself does not provide any special status, preference, or benefits for first-time home buyers. That’s not to say that your chosen lender, won’t, or that there is not a state or local assistance program for first-time home buyers.
It simply means that the FHA itself does not, as part of the single-family home loan program, extend any different terms or rules for those who purchase for the first time. It’s up to the borrower to seek out such programs with a lender or a state/local agency.
When it comes to FHA FICO scores, the minimum possible FICO score to have and still qualify for any FHA mortgage (according to FHA loan rules, NOT lender standards) is any score above 500. However, borrowers with FICO scores below 580 won’t qualify for maximum financing, and a higher down payment would be required in such cases.
Also, lender FICO score standards may be (and often are) higher than the FHA minimum.
Potential FHA borrowers worried about their FICO scores should contact the FHA directly at 1-800 CALL FHA and request a referral to a local, HUD-approved housing counselor who can assist with pre-purchase advice. This is one of the best things any borrower can do before applying for an FHA mortgage loan.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites.
It is easy to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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