For instance if a borrower has a minimum 580 credit score FHA will require a 3.5% down payment.
In addition FHA requires a borrower to have at least a 500 credit score with a 10% down payment.
FHA allows borrowers with scores above 580 to make a 3.5% down payment and up to 6% seller concession to purchase a home.
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.
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 your score is below 580 new FHA changes require a maximum loan-to-value of 97.75% for a rate and term refinance. And up to 85% cash out refinance with a minimum FICO score of 500.
On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers.
- FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment
- Borrowers with less than a 580 credit score will be required to put down at least 10%
- Minimum 500 credit score
FHA allows a home buyer to make a down payment of 3.50% and a seller contribution of up to 6% for closing costs with only a 580 minimum credit score. First time home buyer with credit scores below 580 must make a minimum 10.0% down payment of the purchase price and a seller concession of up to 6% to pay for closing cost is allowed.