FHA Lenders Tighten Credit Requirements
One thing’s for sure, FHA won’t become the new subprime. While the information you’re about to receive isn’t FHA policy, it will impact FHA loans in Utah and throughout the nation.
I obtained an update from an FHA lender yesterday citing new credit requirements for underwriting and new costs.
Middle FICO scores:
601-619 = .5% hit to price.
Less than 600 = 3% hit to price.
No credit score = 1% hit to price.
Additionally, manual underwriting requires a score of 580. However, automated approvals can be any score. Technically, there is no minimum.
It’s important to remember this is the policy of one lender, so if you’re on the cusp and you need a loan, be sure to check with other lenders. Unfortunately, most lenders are headed in this direction.
With home prices stagnant or declining, it’s now more important to get your personal financial house in order before buying a home. If you can’t pay your regular bills on time and don’t have savings, you have no business buying a house right now.