In accordance with the final Federal Register Notice [FR-5404-N-02] on minimum decision credit scores and LTV ratios for FHA-insured single family mortgages, the new requirements are:
- Borrowers with a minimum decision credit score at or above 580 are eligible for maximum financing.
- Borrowers with a minimum decision credit score between 500 and 579 are limited to 90 percent LTV.
- Borrowers with a minimum decision credit score of less than 500 are not eligible for FHA-insured mortgage financing.
- Borrowers with a non-traditional credit history or insufficient credit are eligible for maximum financing but must meet the underwriting guidance in HUD 4155.1 4.C.3.
- Borrowers using 203(h), Mortgage insurance for Disaster Victims, are eligible for 100 percent financing and no down payment is required, provided that the borrowers have a minimum credit score of 500 (borrowers with decision credit scores below 500 are not eligible for FHA financing).
These requirements will be commencing on the effective date: October 4th, 2010. Contact Adam Franzetti to find out more about the new requirements.