subject: What Are Fha Credit Score Requirements [print this page] What are FHA Credit Score Requirements What are FHA Credit Score Requirements
Government backed mortgages are now a little harder to get than they used to be, and this decision was made back in January of this year. Why? Probably because the popularity of FHA mortgages began to climb when the economy started to turn for the worst. FHA, or the Federal Housing Administration, insures mortgages for the lender to secure them if the borrower defaults. There are many guidelines that the government places on these loans include new credit score requirements in order to make sure that your chances of defaulting are very slim.
FHA insured nearly a third of all mortgages in 2009, and now the credit score requirements for FHA require those with a weaker score to come up with a larger down payment. They also began tightening up on how much down payment money the seller could give towards the closing costs, and are trying to point the buyer in the direction of making more of a commitment on the home, by making a larger financial commitment.
It has been a challenge to find the balance between a weakening economy, finding more money, and trying to provide more opportunity to the underserved communities. FHA commissioner David Stevens said, Importantly, FHA will remain the largest source of home purchase financing for underserved communities. The credit score requirements are viewed as a way of keeping less of the FHA loans from defaulting, with the borrower putting more money upfront.
FHA also increased its insurance premiums from 1.75% to 2.25%. In addition, FHA is asking that they are able to raise it each month. This way, they will be able to build back up their reserves from what was lost, and this is the solution that they need in order to fix it. FHA doesnt view this as harmful to the borrower, because he says it will increase their payment just a tad. I think we all realize that right now, we as consumers want to hear less and less about tax or insurance increases, and more about what we can do to change the financial outlook of this country. The one good aspect of this new requirement is that the borrower will not have to bring more money to the table.
The credit score requirements for FHA, state that the borrower now needs to have a minimum credit score of 580 in order to qualify for the 3.5% down payment. With the lower credit score, the borrower will be required to come up with more money. The lower scores will be required to pay up to 10% down, so this could be a rude awakening for those who felt they could simply enter into a loan with no problem.
What you need is an expert before you make this journey. For more information, please visit www.fhaloansnow.net, and get started today.
