FHA borrowers will soon need a 580 FICO score in order purchase a home with the minimum 3.5 percent downpayment, and won't qualify for the program at all if they have a score below 500.
Federal housing officials are moving closer to implementing several policy changes announced in January that will also reduce the maximum allowable seller concession on FHA-backed loans from 6 percent to 3 percent and tighten underwriting standards for manually underwritten loans.
Under changes announced in July, FHA borrowers assigned case numbers after Oct. 4 will need a 580 FICO score in order to purchase a home with the minimum 3.5 percent downpayment.
Borrowers with scores between 500-579 must make downpayments of at least 10 percent to qualify for the government-backed mortgage insurance program, and those with scores below 500 won't qualify for the program at all, HUD said in a Sept. 3 letter to lenders.
For more information, call Pat Worrell, Associate Broker, Coldwell Banker Preffered 484-468-1026.
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