2016 requirements FHA loan - On January 20, 2010 FHA changed it's minimum credit score requirements. FHA now requires a minimum credit score of 500 to be eligible for a FHA loan.
The FHA has taken the following steps
Collection Accounts
FHA does not require that collection accounts be paid off as a condition of mortgage approval. Auto repossession, medical collection accounts, credit card collection account and any other collection accounts do not have to be paid off.
Collection accounts in the borrower’s credit history already results in lowering the credit scores used in the approval process and thus no action is required by the borrower.
2016 Requirements FHA Loan
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 all of the closing cost. Closing cost average around $6,500.00 depending on taxes, hazard insurance and who's paying the transfer tax and owner's title insurance, etc.
To buy a house using an FHA loan you will need a minimum of 3.5% down payment plus closing cost.
On a $100,000.00 purchase you will need $3,500.00 (down payment) plus
$6,500.00 (closing cost). You will need around $10,000.00 if you are
paying all the closing cost.
By allowing the seller to pay for your closing cost you will decrease the amount of out of pocket cash required to buy a home. Buying a $100,000.00 property requires $3,500.00 down payment and if the seller pays $6,000.00 for your closing close. You will only need an extra $500.00 to cover your closing cost. By using a seller contribution for closing cost you will only need around $4,000.00 to buy a $100,000.00.
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Minimum Credit Score Needed
to Buy a Home or Refinance
FHA
Requires a minimum credit score of 500 to buy a home or refinance
VA
Requires a minimum credit score of 530 to buy a home or refinance
Fannie Mae
Requires a minimum credit score of 620 to buy a home or refinance
Freddie Mac
Requires a minimum credit score of 620 to buy a home or refinance
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888-958-4228