Credit Score to Buy a House 2016

Credit Score to Buy a House 2016

New FHA policy requires a minimum credit of 500 to buy a home in 2016. In the old days FHA did not require any credit score. These changes went in to effect in 2010.

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

Borrowers with credit score above 580 require a 3.5% down payment. The funds can be a gift from a family member and a 6% seller's concession is allowed. Often, 12 months of rental history is required for credit score below 640. If no verifiable rent or mortgage history 3 to 6 months reserves will be required. Reserves must be the borrowers own funds.

If you have credit scores below 580 new FHA changes require a 10% down payment. All down payment funds can be the borrower's own funds or a gift. Up to 6% seller's concession allowed. If no verifiable rent or mortgage history 3 to 6 months reserves may be required. Reserves must be the borrowers own funds.

Apply for a FHA loan online.

FHA Guidelines

FHA changed it's collection account guidelines. Going forward all collection accounts within the last two years must be paid off. All collection accounts totaling over $1,000.00 must be paid off. Collection accounts that total less than $1,000.00 and are over two years old may not have to be paid off.

If you have collection accounts that are not paid off - FHA allows you to set up a payment arrangement to qualify. By setting up a payment arrangement FHA will allow you to make three on time monthly payments to qualify for a FHA loan.

Apply now.

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