FHA Guidelines 2016

FHA Guidelines 2016

FHA guidelines require a minimum credit score of 500. 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 6% seller's concession is allowed. Often, 12 months of rental history is required for credit score below 620.

If you have credit scores below 580 new FHA changes require a 10% down payment. Down payment funds can be the borrower's own funds or a gift from a family member. FHA will allow a seller concession of up to 6%. Many times 3 to 6 months reserves may be required

Down Payment

FHA requires a down payment of 3.5% if your credit score is above 580.

To be eligible for an FHA loan your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (31% ratio). Your credit background will be fairly considered. At least a 500 FICO credit score is required to obtain an FHA approval. You must also have enough income to pay your housing costs plus all additional monthly debt (50% ratio). These ratios can be exceeded somewhat with compensating factors.

What documentation will I need?

• Personal tax returns for the past 2 years
• Current pay stubs for the past month
• Bank statements for last 2 months (all pages)
• Latest retirement statement for each active account (all pages)
• Sales contract
• Clear copy of Driver’s License (front and back)
• Clear copy of SS card (front and back)
• Addresses and loan information of other real estate owned (if any)


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KEYWORDS:FHA Guidelines 2016


2019 FHA Credit Score needed to buy
a condo or refinance


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

FHA requires a minimum credit score of 500 to buy a home or refinance


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


What documentation will I need?

  • Personal tax returns for the past 2 years
  • Current pay stubs for the past month
  • Bank statements for last 2 months (all pages)
  • Clear copy of Driver’s License (front and back)
  • Clear copy of SS card (front and back)

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