FHA Loan Credit Score Below 640
FHA Minimum Credit Score
FHA announced a set of policy changes to strengthen the FHA. The changes announced are the latest in a series of changes enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.
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.
Disputed Accounts
If the credit report reveals that the borrower is disputing any credit accounts or public records, the disputes must be resolved. FHA will not allow you to close on a loan with disputed accounts unless the disputed account has a zero balance; is marked as "paid in full" or "resolved"; or has both a balance less than $500.00 and the date of the dispute is more than 24 months old.
To get disputed accounts resolved and updated on your credit report go to www.annualcreditreport.com. Create a file for each credit bureau Equifax, Trans Union and Experian. When you create your file write down your file number and write down the phone number for the credit bureau.
Call each credit bureau
and tell them you are no longer disputing any accounts on your credit
report. Your credit report will be updated within 30 days. FHA loan credit score below 640.
Call us 888-958-5382
www.MORTGAGE-WORLD.com LLC is an online mortgage company specializing in FHA loans for first time home buyers.
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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 500 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
Call Now, Our Staff is Available
888-958-4228