Collection accounts - FHA does not require collection-accounts to be paid off as a condition of mortgage approval. However, FHA does recognize that collection efforts by the creditor for unpaid collections could affect the borrower’s ability to repay the mortgage.
Medical collections - Medical collections do not need to be paid for an FHA loan approval. FHA does not take medical collections into consideration. FHA does not require medical collection accounts to be paid off as a condition of mortgage approval and does not include them in your debt-to-income ratio.
FHA has changed the minimum credit score for new borrowers:
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.
Whether you're planing to buy your first home, refinance, to lower your monthly payments or refinance to take cash out.
Credit score - On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers.
This has allowed the FHA to better balance its risk and continue to provide financing for home buyers.
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