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Are there lenders that do FHA mortgage on 600 score?

I have an opportunity to buy the house I have been renting for the last 6 years at a great price.  My credit score was 637, then I lost track of one of my daughter's medical bills, and paid off a couple more with my credit cards.  This dropped my score to 600.  I want to cash out $9K from my 401K for the down payment and closing, but I'm not sure any lender would work with me with a 600 score.  Does anyone know of one that will?
  • May 23 2013 - Oxford
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Answers (6)

There are some lending institutions that will work with a credit score as low as 590  for FHA's but ask around  to find the best lender; although some lenders will work with the credit score they may require a larger down payment. I hope that I was able to assist you!
  • July 18 2013
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Yes FHA allows lenders to go down to 580 for manual approval, have to find the right lender though..
  • July 18 2013
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I can go down to a 580 in some circumstances.   620, otherwise (where for most it's 640).   Frankly, if the underwriter could possibly see your situation as a "credit relapse" it sounds like a long shot below 620.   But, I'd be happy to look into it for you. 

  • May 24 2013
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I would say that your best bet would be to wait until you rasie your credit score as it will help you greatly with your financing. Also you will want to keep a close eye on your credit report to ensure that the items you are paying off are reflected on the report. If not contact the companies that control the account to report the payoff to the credit bureau or provide a payoff reciept to the credit bureau so that the report will not continue to show a delinquency on that account. It may take some time to repair your credit but it is definitely worth it in the long term. I hope this information is helpful and best of luck!
  • May 24 2013
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I second Alex's thoughts. There may be some simple things you can do to increase your credit score. For example, you may be able to pay a credit card down or write the bureaus directly to see if you can get that medical stuff updated.  Elapsed time may be 90 days max. Yes, there are lenders who may do an FHA loan down to a 600 credit score but chances are there are overlays such as down payment requirement and the interest rate will almost surely be higher. Let me know if you have any other questions. Thanks!

Paul
  • May 23 2013
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Luckily, there are a few lenders out there that will work with a 600 Fico.  I don't know of any that I can recommend though. 

Your best bet would be to work on getting your credit score above a 640.  It'll help you tremendously with pricing and cost. 
  • May 23 2013
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