Minimum credit score home loan reduced to 560 with a 10% down payment. With a 580+ credit score you’ll only need 3.5% down.
Florida Buyers and borrowers please use the contact us Tab to your left with questions.
The 580 credit score mortgage is a great way back for borrowers that have compensating factors to get approved for a home loan. Compensating factors are other qualifications that make up for the low credit score. A long time on the job, extra savings (reserves) beyond the 3.5% minimum down payment, proof of on time rent (housing) payments for the past year or two, these are just a few examples of things that can make up for having a low credit score with a manually underwritten FHA loan.
FHA manual underwriting is what makes it possible to close home loans for people with bad credit scores. The underwriter will review your loan file carefully, looking at your credit explanation letter, your most recent twelve months payment history, your income, and employment history.
This FHA 580 credit score mortgage is a big help for first time home buyers that don’t have a large enough down payment, or 620 to 660 and up credit scores for a conventional home mortgage. Home prices in Florida are at record lows and for one of the first times in history it is actually cheaper to own your own home than it is to rent.
Besides your credit score here are some other things that our FHA underwriters will look for when approving your loan.
- No new derogatory accounts opened in the past 12 months, medical collections do not count against you.
- Judgements must be paid off or in repayment plan
- Ch 7 BK: must be > 2 years discharged, no late payment after BK allowed
- Ch 13 BK: eligible after 12 months of payments with approval of trustee, no late payment after BK allowed
- Foreclosure: eligible after 3 years if no late payments post foreclosure*
*Under the back to work FHA loan program you can have a foreclosure as long as the property has been removed from your name for 12 months and you can prove a decrease in income caused the problems.