FHA Loan First Time Home Buyer

FHA Loan First Time Home Buyer

New FHA policy requires a minimum credit of 500 to buy a home. In the old days FHA did not require any credit score. These changes went in to effect in 2010.



To buy a home you will need a minimum credit score of 500.

Borrowers with credit score above 580 require a 3.5% down payment. The funds can be a gift from a family member and a up to a 6% seller concession is allowed.

If you have credit scores below 580 new FHA changes require a 10% down payment. All funds must be the borrower's own funds. No gifts are allowed and no seller's concession allowed. Many times 3 to 6 months reserves may be required.

Often, 12 months of verifiable rental history is required.

Generally, a borrower who has made timely payments for the last 12 months serves as a guide and demonstrates their willingness to repay future credit obligations. New FHA Policy changes require minimum FICO score to be 500. These FICO requirements went into effect in the spring 2010.

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 for a conventional loan. Sometimes credit score down to 500 are accepted if there are compensating factors that offset the credit risk.

Items you will need to Purchase a home:

* One Month Pay Stubs
* W2's & Tax Returns for the Last Two Years
* Two Months Banks Statements (all pages)
* Purchase Sales Contract
* Verifiable Rental History
* Copy of Social Security Number
* Copy of Driver's License

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Minimum Credit Score to buy a house or refinance

* FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment

* FHA loan requirements new borrowers with less than a 580 credit score will be required to put down at least 10%

FHA Credit Score

Requires a minimum credit score of 500 to buy a home or refinance

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Collection accounts

A collection is minor in nature usually does not need to be paid off as a condition for loan approval

Bankruptcy

Chapter 7 Bankruptcy at least two years must have elapsed since the discharge date

Foreclosure

Foreclosure must have been resolved for at least 3 years 

  • Government loan: Seasoning is determined by the date the claim was paid
  • Loans other than Government: Seasoning is determined by the date of sale the lender sold the property

Short Sale

FHA guidelines requires three year past from the date of sale of the property

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