Do Higher FHA Loan Limits in 2019 Mean Higher Credit Requirements?

January 4, 2019

FHA loan limits are going up for the second year in a row; in 2019 your ability to buy a 1-4 unit home gets a boost thanks to the higher limits. No FHA loan limits are going lower in 2019, and only about 180 counties in the entire country will see their loan limits staying the same. All other areas will see higher loan limits.

But with the higher limits, will FHA borrowers see more strict credit requirements in the new year?

FHA Loan Rules for FICO Scores Are the Same in 2019

FHA loan FICO score requirements and other credit rules of the program will NOT change in 2019. The same FICO score rules listed in the FHA single family loan handbook, HUD 4000.1, remain the same.

Those credit score requirements are 580 or higher for maximum financing and the lowest down payment, and for those with FICO scores between 500 and 579, 10% down would be required.

Lender Standards May Vary

What borrowers should know is that lender requirements may be higher than these FHA loan program minimums. But in general, house hunters shouldn’t experience a wave of suddenly-more-strict FICO score guidelines just because the national loan limits for government-backed mortgages has gone up.

Borrowers who are afraid their FICO scores are marginal or don’t qualify for an FHA mortgage loan have options; if you call the FHA directly at their toll-free number (1-800-CALL-FHA) and request a referral to a local, HUD-approved housing counselor you can get on the road to being more fully prepared for your home loan journey including being more financially ready.

Get Your Credit Ready

In the meantime, it helps a great deal to examine your credit reports, adjust your payment habits to insure there are no late or missed payments for a full 12 months before your loan application, and you can work on reducing the amount of debt you have compared to the amount of income you bring home each month.

FHA home loan limits are higher in 2019, and while the housing market has its’ ups and downs, lenders who offer FHA mortgages do so with the confidence that the government is backing the mortgage loan; your ability to purchase your home in the new year does not depend on whether or not you are a first-time home buyer when applying for an FHA loan.

Any financially qualified borrower is eligible to apply for an FHA loan to buy a home they want to live in full-time. Thanks to housing counseling resources offered by HUD (see above) can help you get truly ready to apply with a much better chance at home loan approval.

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