FHA Credit and Your FHA Loan
Take the Steps to Review Your Credit
FHA loan rules apply for all borrowers when it comes to basic minimum credit standards. The FHA loan requirements that will affect your transaction include FICO score rules, down payment requirements, and the basic terms of your mortgage.
You cannot be rejected for an FHA home loan on the basis of factors that have nothing to do with your financial qualifications, employment, income, being an owner/occupier, etc. A home may not be suitable for an FHA loan, a borrower may be denied the loan because he or she doesn't intend to live in the property as the primary residence, or because of factors that affect the economic life of the property.
Credit Requirements for FHA Loans
FHA loans provide great assistance to many first-time home buyers by offering mortgage loans with lower down payments. While this is a benefit for many people, recent changes in FHA Loan credit requirements may have put the loans just out of reach for some would-be homeowners with questionable credit history.
- The Facts About FHA Credit Requirements and FICO® Scores
- What FICO® Score Do I Need Buy A Home?
- Do FHA Loan Requirements Apply to All Borrowers?
Benefits of Having Good Credit
Homebuyers looking to take advantage of great FHA loan benefits should already know they need to establish the best possible credit rating. FHA loan applicants with a better credit rating increase their options for mortgage or refinance loans.
In order to qualify for the low 3.5% FHA loan down payment, applicants will need a FICO® score of at least 580. Those that don't meet that criteria will have to put a down payment of 10% on the mortgage they want.
- Are My Tax Returns Required for an FHA Loan?
- How Your Credit Report Affects FHA Loan Approval
- Time to Get Started With an FHA Loan
Improving Your Credit
If your credit is less than solid, consider delaying your home purchase and work on improving their credit scores. Applicants who have a minimum credit score of less than 500 are not eligible for FHA mortgages.
While FHA loans are a great option for people buying a house, applicants can make the process even easier if they take steps toward ensuring their credit history is in tip-top shape. FHA advises prospective home buyers to approach the loan process with their best possible credit history to eliminate any potential risk of not qualifying.
- Your FHA Loan Credit Qualifications
- Minimum Credit Scores for FHA Loans
- What Should I Know About Applying for an FHA Mortgage?
Fixing Credit Report Errors
Some borrowers who want to apply for an FHA loan find their applications held up by problems with what is on their credit report. Take proper steps to check the accuracy of your credit report with Experian®, TransUnion® and Equifax®.
Once you've gotten your report from the three bureaus, carefully examine your credit history for anything out of the ordinary, such as unauthorized loans taken out in your name, incorrect late payment records or anything that seems questionable, no matter how minor you think it is.
- Credit Monitoring, Data Security Breaches, and Your FHA Loan
- The Facts About FHA Credit Requirements and FICO Scores
- FHA Home Loan Applications and Credit Freeze Issues
Identity Theft and Fraud in the News
Now more than ever, it is crucial to pay close attention to your credit reports due to elevated security breaches, hacks, and security compromises. No major corporation is immune to these attacks-including the credit reporting agencies themselves.
We've listed a timeline of some of the most headline-grabbing hacks reported in recent years. Remember, these are only SOME of the incidents you may have heard about; each one is a good example of why it pays to continuously monitor your credit.
- FHA Home Loan Applications and Credit Freeze Issues
- Credit Monitoring, Data Security Breaches, and Your FHA Loan
- Credit Advice for Home Loan Applicants
SEE YOUR CREDIT SCORES From All 3 Bureaus
Do you know what's on your credit report?
Learn what your score means.
FHA Loan Articles and Mortgage News
July 21, 2021 - Are you concerned that your lender might deny your home loan? Do you know why your loan might be denied and what you can do about it ahead of time? Reasons may include late or missed payments on rent or past mortgages, low credit scores, or houses that cannot pass the appraisal process.
July 14, 2021 - What are the benefits of an FHA mortgage loan? There are many things that borrowers may view as helpful, more than may be viewed as pro-consumer, but what are the actual benefits of an FHA mortgage over other types of home loans?
July 3, 2021 - Are you a first-time home buyer? If so, you have a wide range of options open to you. Some are surprised to learn that those options include the ability to build a home on your own lot using a One-Time Close construction loan. Yes, even a first-time borrower may qualify for these loans.
June 29, 2021 - On paper, FHA loan minimums for credit scores start at 580 for the lowest down payment. Its true that the lender may require a higher score, but for FHA mortgages, 580 is the bare minimum FICO score you can have and still be considered for maximum financing.
June 28, 2021 - The Department of Housing and Urban Development official site has announced important changes to its home loan policies regarding how student loan debt is calculated for the purposes of home loan approval, improving the home loan processes for affected borrowers.
