2012 FHA Guidelines
2012 FHA guidelines
requires a minimum credit score of 530 to buy a home or to refinance your existing mortgage. These new guidelines went in to effect in the summer of 2010.
To qualify for a 3.5% down payment FHA requires a minimum 580 credit score. With a 580 credit score the down payment can be the borrowers own funds or can come from a gift from a family member. Credit scores from 530 to 639 will require 12 months proof of rent history.
FHA guidelines allows a home buyer to finance up to 6% for seller's concession. The seller's concession must be written into the sales contract.
Home buyers with credit scores below 580 are required to make a down payment of 10%. The down payment funds must be the borrower's own funds. No gifts are allowed. Closing costs must be from the borrower's own funds. No seller's concessions are allowed.
To refinance you will need a minimum credit score of 530.
Borrowers with credit scores above 580 can refinance up to a 97.5% loan-to-value on a rate and term refinance. And up to 85% cash out refinance with credit scores above 580.
If you have credit scores below 580 new FHA changes require a maximum loan-to-value of 90% for a rate and term refinance. And up to 75% cash out refinance with credit scores below 580.
Most lenders require a minimum credit score of 640 for a 2012 FHA loan.
Whether you're planing to buy your first home, refinance, lower your monthly payments, buy a second home, consolidate debt or get pre-approved for a mortgage. A perfect credit score is not needed for an FHA loan approval.
In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA loan than a for a conventional loan. Credit scores down to 530 are accepted if there are compensating factors that offset the credit risk.
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