FHA Loan Requirements 2016

FHA Loan Requirements 2016


What kind of credit score do you need to buy a house or refinance your current mortgage?

FHA loan requirements and guidelines issued by the US Department of Housing and Urban Development requires a minimum 580 credit score to purchase a home with a minimum down payment of 3.5 percent. If you are a Homeowner with a credit score of 580 then FHA allows you to refinance up to 97.75% of the value of the property.

In general, when you apply for an FHA loan at a major bank and they tell you their minimum credit score requirement is 620 or 640 this does not mean that it's FHA's minimum credit score requirement. It means that they are the bank's credit score requirements.

What is an FHA loan?

An FHA loan is a mortgage insured by the Federal Housing Administration. FHA provides mortgage insurance on loans made by FHA approved lenders. The FHA approved lender will make the loan because FHA will insure the loan resulting in a lower risk in case the homeowner defaults on the loan.

  1. FHA approved lender - The FHA approves lenders to make FHA loans. The approved lenders are authorized to make FHA loans. Each lender has their own requirements for approving an FHA loan based on credit score and debt-to-income ratios. 
  2. FHA approved brokers - FHA approved brokers are mortgage brokers that are approved by an FHA approved lender to arrange FHA loans. The advantage of using an FHA approved broker is that they can shop your loan with different lenders instead of apply with just one lender.
  3. FHA lead generators - An FHA lead generator is a company that operates a website or a facility that the sole purpose is to gather information and sell that information to an FHA approved lender or FHA approved broker. In general, FHA lead generators do not make or arrange loans.

FHA loan requirements 2016


FHA Back to Work Program - Borrowers may be eligible for an FHA insured loan on a purchase transaction after 12 months from the completion, discharge, trustee's sale if the borrower meets the requirements for extenuating circumstances Economic Event.

Borrowers with a prior bankruptcy, foreclosure, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the bankruptcy, foreclosure, deed-in-lieu, short sale was the result of a documented extenuating circumstance.


Mortgage Insurance - The Federal Housing Administration (FHA) announced the reduction of it's annual Mortgage Insurance Premium (MIP) rates.

FHA will reduced the premium from 1.35% to .85% a reduction of .5%.

Combined with low interest rates and the reduction of MIP rates means that it is a great time to buy a home or refinance your mortgage.


Closing cost - FHA allows the seller to pay up to 6% of your closing cost.

If you are buying a $100,000.00 house FHA allows the seller to pay up to $6,000.00 for your closing cost. It must be in writing in the sales contract, "Seller will pay up to 6% of buyer's closing cost."

If you do not write it into the sales contract then you will be paying the closing cost. In the state of Florida closing cost for a $100,000.00 house average around $4,300.00 depending on taxes, insurance and who's paying the transfer tax and owner's title insurance.

By allowing the seller to pay for your closing cost you will decrease the amount of money required to buy a home. Buying a $100,000.00 property requires $3,500.00 down payment and if the seller pays up to $6,000.00 for your closing cost you will only need around $4,000.00 to buy a $100,000.00 in Florida.

Are you short funds to close? The FHA no closing cost loan allows all of your closing cost to be rolled into your loan including your appraisal fee, hazard insurance premium and even your escrow account.

Are you a first time home buyer? Do you need to get pre-approved for a first time home buyer program in Florida?


FHA Loan Requirements 2016

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FHA loan requirements 2016 - FHA loan requirements 2016


Mortgage World Home Loans of New Jersey is a licensed residential mortgage broker in the state of Florida and will match you with the lender that will approve your FHA loan down to a 500 credit score.


We look forward to working with you.



Minimum Credit Score Needed

to Buy a Home or Refinance in 2016


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Call 888.958.4228

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FHA loan

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

FHA minimum

credit score 500


VA loan

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

VA minimum

credit score 500


Fannie Mae

Requires a minimum credit score of 620 to buy a home or refinance

Fannie Mae minimum

credit score 620


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