Credit Requirements to Buy a house with FHA Financing

Good Credit? Bad Credit? Can I Buy?

Just got some new information on FHA loans. Lots of buyers think you need credit in the 700’s to buy a house. NOT true….

Here are the current FHA guide lines for FHA

Minimum loan score & LTV allowed for purchase transactions:

• Loan score lower then 500 = Not Allowed
• Loan score 500-579 allowed with maximum 90% LTV & the additional requirement listed below
• Loan score 580-599 allowed with a maximum 95% LTV and the additional requirements listed below
• Loan score 600 & higher allowed with a maximum 96.5% LTV
  

Additional requirements: ALL of the followings Requirements apply for transactions with loan scores less then 600

For Accept/Refer Credit Risk Class:

· Accept : maximum ratios 31/43

· Refer : maximum ratios 31/36 AND two months principal, Interest, Taxes and insurance (PITI) reserves

For all Credit Risk Classes:

• Seller contribution limited to 3%
• Gift funds may NOT be used for the required 5% or 10% down payment.
• Down payment assistance programs may not be used for the required 5% or 01% down payment.
• FHA guidelines here ... "FHA"
  

Questions or concerns please contact me at 630.637.9009 or Dan@DanFirks.com

As Always… Make It A Great Day!

Dan