Articles Tagged With: FHA FICO Requirements

What you should know about FHA 203(h) Loans For Disaster Victims

February 10, 2015

FHA Loan Questions: Minimum Income Requirements

A reader asks, “Hello just want to know how much do my annual gross amount have to be to get approved for a FHA loan?” Two of the most common myths about FHA home loans are that the FHA is only for first-time homebuyers and that FHA loans have a minimum income or maximum income requirement. None of those things are true. The FHA does not have a minimum dollar amount the borrower must earn in order to qualify, and there is no income ceiling or limit for FHA loans. FHA loans are not specifically for disadvantaged people, nor are they specifically for first time home buyers. However, it’s important for all potential FHA borrowers to know that your lender will determine whether or not you can afford the new | more...

January 28, 2015

FHA Mortgage Loan Trends

By Joe Wallace

FHA mortgage loan rates kicked off the week more or less unchanged, best execution-wise–the previous two business days had some improvements in rates following a “consolidation” ahead of a highly anticipated announcement from the European Central Bank that had great potential to affect mortgage loan rates depending on investor reaction to the contents of that announcement. With the ECB announcement come and gone, and rates improving after another highly watched announcement by the Fed here at home, we find rates moving back to lows some sources report going down to 2013 levels. That’s great news for those looking for 30-year fixed rate conventional mortgage loans as the best execution rate for those loans has moved to about 3.625% depending on the lender. That rate is not available to all borrowers | more...

January 24, 2015

FHA Loan Rules for FICO Scores and Applications Post-Bankruptcy

By Joe Wallace

A reader asks, “What are the credit score and requirements to qualify for a FHA loan? Also, we filed bankruptcy over a year ago, what are the time limits of being discharged before someone can qualify for a FHA loan? Thank you in advance.” FHA loan rules for FICO score minimums are included on the FHA official site at www.FHA.gov. There is a chart there that breaks down the required minimum FICO scores for minimum financing, basic FHA loan program eligibility (with a higher down payment due to lower FICO scores) and cases where the FICO score does not qualify for an FHA home loan. Here is that chart: Note that FHA FICO score requirements are MINIMUMS. The lender may have higher standards. In fact, borrowers may find many lenders | more...

January 7, 2015

FHA Loan Rules: FICO Scores

By Joe Wallace

Many FHA loan applicants want to know what the FHA loan minimum FICO score requirements are, but did you know that FHA loan standards are only part of the equation? The lender will also have minimum FICO scores as a requirement–these minimums may match the FHA standards or exceed it. In many cases a borrower will find the lender has more stringent standards than the FHA. What are the FHA minimum FICO score requirements? The rules for FICO scores on FHA new purchase home loans and refinance of those loans can be found in HUD 4155.1, which gives instructions to lenders on how to process FHA loans. That table above is reprinted from HUD 4155.1, and as you can see, FICO scores of 580 and above are technically eligible for | more...

December 23, 2014

FHA Loan Reader Questions: Credit Scores for Co-Borrowers

By Joe Wallace

A reader asks, “Hi wanted to know if my gf has income and a co signer or co borrower can see be able to get an FHA loan if her credit ain’t high but the co person is high.” The answer to this question may depend greatly on the lender, the circumstances, and whether the borrower has compensating factors that might offset a lower FICO score. FHA loan rules spell out minimum credit scores and the lender will also have minimum credit score requirements which must be met. The FHA loan rulebook, HUD 4155.1 in Chapter Four has rules which spell out some standards for credit for all applicants, co-borrowers, etc. Chapter Four says in part: “If a credit score is available, it must be used to determine the decision | more...

November 5, 2014

FHA Loans and Social Security Numbers: A Reader Question

By Joe Wallace

A reader asks, “I live in a community state property. My husband does not have a social security number to run his credit. How can I proceed with a FHA loan without being able to run a credit report on my husband?” FHA loan rules are very specific when it comes to the identity and documentation requirements for all parties to be obligated on an FHA home loan. According to HUD 4155.1 Chapter One, Section B, the following applies: “All borrowers, including United States (U.S.) citizens, must have a valid Social Security Number (SSN) and must provide evidence of that SSN to the lender. The lender is responsible for • documenting an SSN for each borrower, coborrower, or cosigner on the mortgage • validating each SSN either through − entering | more...

May 23, 2014

FHA Loan Requirements For Occupancy: What The Rulebook Says

By Joe Wallace

When you want to purchase a home using a single-family FHA home loan, you should know what the FHA loan program’s requirements are for occupancy of the property. Did you know you are required as a borrower to certify you’ll use the home as your personal residence? FHA loan rules in HUD 4155.1 explain these rules and how they apply to the borrower. There are many questions about occupancy including whether or not a borrower can purchase a single family home and rent out individual rooms, or whether a multi-unit property can be obtained and rented out. Essentially, the FHA single-family home loan program rules state the following: “At least one borrower must occupy the property and sign the security instrument and the mortgage note in order for the property | more...

May 16, 2014

FHA Announces New Credit Access Measures For “Under Served Borrowers”

By Joe Wallace

The FHA has announced a new program to help under served borrowers get better access to credit to buy a home. According to the FHA press release HUDNo14-048, and the Blueprint for Access pamphlet, a new program will help with credit counseling and savings on their mortgages as a result of attending that counseling. “Today, the Federal Housing Administration (FHA) issued its ‘Blueprint for Access’ outlining the additional steps the agency is taking to expand access to credit for underserved borrowers. These steps include encouraging a broader use of housing counseling. This week, HUD will publish a notice in the Federal Register for the Homeowners Armed with Knowledge (HAWK) pilot program to further incorporate housing counseling into the home buying process for borrowers using FHA insured financing.” The press release | more...

May 9, 2014

FHA Loan Rules For Loan Approval: Previous Housing Obligations and Your Credit

By Joe Wallace

When you fill out your FHA loan application paperwork online or in person, it’s obvious that part of the qualification process involves having your credit scores examined and your employment verified. What may not be so obvious is that the lender is also looking for patterns of reliability in areas such as the timely payment of your monthly obligations. Some FHA loan applicants might mistakenly assume that while late or missed mortgage payments might be a factor that missed rent payments aren’t held in the same esteem. Is this true? Not according to HUD 4155.1 Chapter Four, Section C, which has instructions for the lender on checking credit report data. A strict interpretation of Chapter Four reveals no difference between how the FHA or the lender should view late or | more...

May 6, 2014

FHA Loan Reader Questions: Chapter 7 Bankruptcy and Credit Scores

By Joe Wallace

This reader comment raises some very important issues potential FHA borrowers should keep in mind when it’s time to apply for a new home loan, no matter whether applying in the wake of a bankruptcy or not. The reader says: “I was in Chapter 7 on 8/2011 and Discharged 2.5 years ago. I just applied for a loan and when my credit was pulled they found the loan of the home I own as a open account. This loan was closed for several years and it was just put back on in 2/2014 for no reason, which I have proof since I keep all my reports. I disputed it and it was taken off right away.” “Meanwhile it cleared up that problem showing the account closed but it left late | more...