Minimum Credit Scores for FHA Loans in 2013

Mary Baldwin December 19, 2013

Because of recent changes that occurred in the legislation of the United States, lending requirements and various other related issues, the FHA regulations have also gone through different modifications. Some of these changes are happening because of the new laws that are supposed to clarify legal ambiguities and make the FHA process more transparent and straightforward, as well as to modernize the entire FHA loan program. Consequently, some other alterations are a response to the economic issues and variable market conditions.

Changes in Minimal Credit Score

What is more, the minimal credit score requirements demanded for FHA home loans are depended only on the product needed by the applicants. In most cases, for an applicant to attain the maximum financing for a regular home purchase, they have to have a credit score of 580 points or they would not be eligible for any of the FHA mortgages. Scores of 620 and above are preferable, with 680 being the most desirable.  Those who have experienced credit problems in the past and cannot meet the requirements, can still try to improve their score in time by certain methods, and one of the first steps in this direction would be asking for help from credit counseling.  Most lenders won’t loan to anyone with a 580 credit score no matter what the FHA minimum standard is.  They want 620 and above.  Please contact a local, qualified lender to guide you through this process.

Nevertheless, according to FHA policy, a minimum score of 580 is required for a 3.5% down payment, and in order to buy a home with a score lower than this, you will be required to come up with a down payment of 10%. In 2012, the FHA loan refinance minimum credit was of 580, in the case of a 97.5% rate and 85% cash out on refinance. Likewise, the 580 credit score down to 530 are permitted only with a lower loan, and the FHA has taken a series of steps that are mentioned below.

Low Down Payment Still an Option

For instance, the Federal Housing Administration updated the combination of down payments and FICO scores for all the new borrowers; the combination will now need to have a FICO score to be eligible for 3.5% down payment programs. Additionally, three lines of credit will be required in order to apply for an FHA loan, and it will permit substitute forms if the borrower does not have sufficient credit on their current credit report.

Furthermore, during a guarantor analysis of the borrower’s credit, the whole pattern of the credit behavior will be evaluated and not only singular cases of late payments. If a good payment history has been maintained, the borrower will most certainly not be disqualified. Also, according to FHA guidelines, borrowers who are delinquent on any sort of federal debt, such as student loans and tax liens, are not eligible. They will need to have passed a period of a minimum two years since the discharge date of the borrower, and a full explanation along with the loan application will be necessary. Naturally, the borrower needs to qualify financially, have re-established high credit scores, and above everything else, have a stable job.

If you have any questions about this loan program or any others, I have a great loan person for you to speak with.  Call me, Mary Baldwin, at 310.600.5966 for all your housing needs in Sherman Oaks.



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  1. Hi,
    We recently tried to pre-qualified for a home loan, and the loan officer is telling me a credit score of 640 or above is required for FHA. I have read 580 in several different places. Can you tell me which is correct, and why she might be stating something different?

    1. It’s sad that whoever is advertising this information doesn’t seem to understand HUD VA/FHA rules. I wonder if this piece I am writing will get posted. According the the HUD lending guidebook (known as the 4155) there is NO FICO requirement for FHA or VA lending. Never has been. Credit score is NOT a criteria for a VA or FHA loan. Matter of fact, one could have NO score at all or a score of 350, which is the minimum. HUD does not use FICO or ‘traditional credit scoring’ for determining qualification. In order to qualify, one must have 12 months of on time payments, income qualify and have no outstanding collections or liens. No late payments in the past 12 calendar months. To say that they have raised the score requirement is a marketing tactic and for those who are familiar with HUD – it makes the person who is writing about this ‘change’ dis-credited and un-educated in my mind. NO CREDIT SCORE REQUIREMENTS FOR HUD- VA- FHA LOANS. The BANKS, however can set what they want, and each bank can do whatever they want. Most recently (past 8 years or so) banks have tightened up on their requirements. In truth though, one can have a loan traditionally underwritten by a bank and no score is required- for HUD to guarantee the loan. The bank/lending institution sets the score requirements. NOT FHA or VA. It’s sad that all of this is written – for the author of this site- please do your research before you write- for those of you looking for a loan, have faith, keep your payments on time, make sure you income and DTI qualify, and keep looking for a lender that will traditionally underwrite a loan. They may be hard to find and may not exist in your area, but let it be known that FHA did not raise the FICO score criteria- there is none. Best of luck1

      1. Thanks so much for reading my blog and participating in the discussion. The FHA does have credit score requirements but you are correct – that it is up to the individual lender to qualify the buyer for the loan according to the standards of their institution, which I did mention in the article. You appear to be very knowledgable about this subject so I thank you for your input. Nowhere in my article did I say anything about VA loans.

  2. I have a credit score of 580, I really need help with what I need to do to get a home loan. I do have the down payment of 3.5%.

  3. I have a cs of 619 husband 645 we have a combined income of 94,000. If I can’t get my score up to 620 by closing can he qualify without me? We live in the Dallas Fort Worth area of Texas.

  4. I have a 530 CS, due to maxing out CC’s. My husband has a CS of 700+. Do you believe we could qualify for a mortgage on a $200K home? We would be bringing about $10k for a DP.

  5. Mine is at 620 with an income of $70,000.
    I do not have any debt but one credit card with zero balance.

    I have been very hesitant in submitting any application knowing that doing so will lower my score I little bit.
    So I am right to wait a bit more or should I go ahead get started?

  6. Will they ever consider approving an FHA loan if there is a tax lien that is currently under a payment plan and that payment plan is being adhered to?

  7. Hi I am looking to find a place for my family fast. My credit score is under 580 but its because I have never bought anything. I have good work history and I have paid bills on time but I think my back child’s support due to fileing for disability because of epilepsy I got behind and they act like that is causing a big dent in why I can’t get a loan. Please email me and give me some advice on what I can do quickly to find my family a home. thanks

  8. FHA does now have a minimum credit score of 580, they didn’t for a LONG time but to qualify with the minimum down you do in fact have to have 580 or better. Where you are seeing the discrepancy is something called an “overlay”, basically the person making you a loan is requiring this above and beyond what FHA will insure it for.

    It is amazing to see on the correspondent side that we can now do FHA loans with 580 credit scores and only 3.5% down in Arizona and California.

    Good post Mary !!

    1. Justin, who is doing those loans? Sub-prime? My fico is 624 and wife’s 580 but we just paid a lot of old debt off. Hoping to raise hers by that. Also, we have 20% down payment as well.