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Minimum Credit score for FHA loans increased

Shared by Sara on Sat Mar 14, 2009 2:25 am
Borrowers will now require a minimum credit score of 620 in order to get a FHA loan. This has come into effect from 6th of March, 2009. This is considered as an attempt by FHA to lower the default ratio which has been running at about 12%. Apart from FHA, VA and USDA loans will also require a credit score of 620 henceforth. Source: http://www.biggerpockets.com/renewsblog/2009/03/09/credit-score-620-loan/

Community Members Opinion

Niicss
Niicss

Joined: 03 Oct 2005

Posts: 4770
Location: New Jersey

499.28 Dollars($)

Posted: Sat Mar 14, 2009 2:37 am Post subject:

Hi Sara Thanks for sharing such an important news with the community. With FHA raising its minimum credit scores, borrowers with credit score below 600 will not be able to obtain a mortgage. Earlier, a lot of people could easily obtain a mortgage due to the minimum down payment and 580 credit score requirement of FHA. This had increased the risk of default by a borrower. It is expected that with the increase in the minimum credit score requirement, FHA would be able to lower the default ratio. Thanks. _________________ Good is the Enemy of Great.

jenkin7

Joined: 04 Jun 2007

Posts: 4537
Location: Hawaii

728.43 Dollars($)

Posted: Sat Mar 14, 2009 6:00 am Post subject:

Hi Sara, Thanks, indeed, for having shared a vital update like this with the entire community. Given the shape the current real esate market is in and the number of foreclosures being on the rise, one could have anticipated such a move from FHA. This will no doubt bring the number of foreclosures down by quite a margin. But this will also make it even more difficult for the prospective borrowers to find an affordable loan in this market.

jay4

Joined: 16 Feb 2010

Posts: 1

1.18 Dollars($)

Posted: Tue Feb 16, 2010 5:49 pm Post subject: This is not true! we will Still go down to 580

For the most part everyone here has been very helpful in your task. I myself may can go that extra mile. I am a wholesale lender that writes loans with TRUE FHA guidelines ans scores are for the most part not the main issue we can go down to a 580 score on both Refi & Purchase and approve them all day long. drop me an email for more info jay AT truefha DOT com (good luck to you and your family)

rushton3

Joined: 25 Aug 2011

Posts: 1

1.10 Dollars($)

Posted: Thu Aug 25, 2011 12:29 am Post subject:

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bonglysaght

Joined: 05 Sep 2011

Posts: 1

1.10 Dollars($)

Posted: Mon Sep 05, 2011 2:21 pm Post subject:

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