How to Qualify for FHA Loan

How to Qualify for FHA Loan

What credit score do you need to buy a house with an FHA loan?

The answer is. It depends on who you ask.

On January 20, 2010 FHA announced a policy change to address risk and strengthen finances. FHA changed the minimum credit scores for new borrowers:

• Borrowers are required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program
• Borrowers with less than a 580 credit score will be required to put down at least 10%

FHA makes the rules for loans they will insure and the minimum credit score to buy a house with an FHA loan is 530. In the old days, FHA did not have a minimum credit score requirement.

FHA minimum credit score for major banks

All the major banks Wells Fargo, Bank of America, Chase, Citigroup, etc. have minimum credit score requirements for FHA loans. When you apply for an FHA loan at a major bank and they tell you their minimum credit score requirement is 640. This does not mean that it's FHA's minimum credit score. It means that it is the bank's minimum credit score requirements.

After the financial crisis of 2008 all the major banks raised their standards for approving an FHA loan. Because the banks make the rules for loans they will approve they may require a minimum credit score of 640 for their loans. These guidelines are the bank's guidelines. What this means is that all the major banks including Wells Fargo, Bank of America, Chase, Citigroup, etc. make the rules for the loans they approve.

How to Qualify for FHA Loan 

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