First Time Home Buyer Florida Bad Credit

First Time Home Buyer Florida Bad Credit


First time home buyer Florida - FHA minimum credit score is 500.

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

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

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

If you have credit score below 580 new FHA changes require a 10% down payment. The funds can be a gift from a family member and up to 6% seller concession is allowed.

First Time Home Buyer Florida Bad Credit

FHA loans require two mortgage insurance premiums. The upfront one, which is 1.75% of the loan amount and must be paid when you get the loan. It can be financed and may be wrapped into your loan payments. The annual premium is 1.25% of the loan amount. It is paid in groups of 1/12th of the total loan amount and are included in your monthly mortgage payments.

When you compare FHA vs. conventional loans FHA loans win the down payment race hands down. FHA loans only require a minimum down payment of 3.5 percent of the purchase price versus a conventional loan requiring between 5 to 20 percent down payment.

To be eligible for an FHA mortgage 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 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.

First Time Home Buyer Florida Bad Credit

FHA closing cost. FHA regulates some of the closing costs associated with a FHA loan. FHA allows the seller to pay up to 6% of the sales price for closing cost.

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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Minimum Credit Score Needed

to Buy a Home


FHA announced a policy change to address risk and strengthen finances. FHA changed the minimum credit scores for new borrowers:

  • New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program
  • New borrowers with less than a 580 credit score will be required to put down at least 10%
  • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well
  • This changes went into effect in 2010

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