Minimum Credit Score For FHA

Minimum Credit Score For FHA

Minimum credit score for FHA.

The lowest credit score to buy a home or refinance is 500. New requirements for both FHA and VA require a minimum FICO score of 500.

• FHA requires a minimum score of 500
• VA requires a minimum score of 500
• Fannie Mae requires a minimum score of 620
  
• Freddie Mac requires a minimum score of 620

FHA allows borrowers with scores above 580 to make a 3.5% down payment and up to 6% seller concession to purchase a home. Reserves may be required for borrowers with scores below 640.

If you have FICO scores below 580 new FHA changes require a 10% down payment. The funds can be a gift from a family member and up to 6% seller concession is allowed. Reserves may be required for borrowers with scores below 600.

Borrowers with a score above 580 can refinance up to a 97.5% loan-to-value on a rate and term refinance. And up to 85% cash out refinance with a FICO score above 580.

If you have score below 580 new FHA changes require a maximum loan-to-value of 90% for a rate and term refinance. And up to 75% cash out refinance with FICO score below 580.

VA allows veterans to buy a home with no money down with a minimum score of 500. VA guidelines allows a veteran buy a home using their own funds an/or gift funds and up to 4% seller concession for closing cost.

Fannie Mae and Freddie Mac may require a minimum score of 620 but it becomes cost prohibitive for borrowers with scores below 660 for higher loan-to-value loans. Borrowers with higher scores are more likely to qualify for a conforming loan with a higher loan-to-value.

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