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How much of a down payment is required for FHA mortgage with bad credit?

  • February 06 2012 - Houston
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Answers (16)

You may want to at least have a lender run you through Fannie Mae's Desktop Underwriter or Freddie Mac's Loan Prospector underwriting programs to see if you can get approved with either for a conventional loan.  Far better terms than FHA, and you'll avoid the hefty upfront mortgage insurance.  Freddie Mac Direct accepts scores as low as 620.
  • December 12 2013
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There is a new program that allows you to get 2 loans. One for 96.5% and another small loan to pay 3% of the down payment and closing costs. Great program, I know of a few lenders that offer it..
  • December 12 2013
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Ms Carmichael,

Those scores (630, 637, 622) and 20% down will not disqualify you from a conventional-conforming loan.

Just hit the Pro tab and reach out to some lenders.
  • December 09 2013
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Profile picture for AmyHayes Carmichael
Hello My husbands FICO Score says 630, 637, 622 Wells Fargo denied us for FHA loan saying our score had to be 640. We were told we had to put 20% down. We have enough to put 20% the price of the home we are looking at is 75K. Can someone please point me in the right direction as to who will lend us the money. 
Thank You
Amy
  • December 09 2013
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Profile picture for Brent Tye
The down payment requirement depends on your credit score.  Typically, you need 3.5% down payment.
  • December 07 2013
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[spam deleted by Zillow moderator]
  • December 07 2013
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Robert 3.5% is the standard down payment required for FHA. But if your score is south of 580 then you may need a 10% down payment. Please note depending on your actual Fico score you may not need to go FHA. Please let me know if you have any questions.
  • December 07 2013
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Hi Robert, Take a look at this link: http://www.zillow.com/fha-loan/ Thanks, Candace Zillow Customer Support
  • February 07 2012
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In most intances FHA works with credit scores of 580, and 3.5% as down payment.
  • February 07 2012
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Profile picture for KKSka14
I'm not hawking any product on here, but there is a nationally renowned credit expert that I send all my clients to who have poor credit. She has written a popular book on credit and is a national speaker who commands middle 5-figure fees to speak at conferences. I send all my clients to her and she has not failed me once. If interested you can shoot me an email. I'd be happy to give you her name/contact. I'm not even licensed to do business in Texas so there's no benefit to me other than--well, I don't know. I honeslty don't even know why I give advice on here.
  • February 06 2012
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Profile picture for RobertMP
Thanks to all who responded! In a nutshell, my credit is poor due to a defaulted student loan that went into default while I was unemployed (and I had used up all available "unemployment deferrment" time). Kinda hard to pay on $200k of consolidated loans (just mine) with zero income. The student loan will be repaid via garnishment over a very long time period. We had a foreclosure in Dec 2009 as well due to my unemployment. Things have changed and employment is not an issue now -- just residual poor credit scores. I will pull my three scores and look into the secured credit card approach to increase my scores. Otherwise, all bills are being paid on time, we have no credit card debt, and our car will be paid off next year. With more than $120k gross annual family income (now) and taking steps to improve the fico score we should be ready to buy a house this fall. I will keep all the responses so I will have the lenders/agents who were kind enough to help answer my question. Dealing with credit scores and shopping for a good 30-year fixed mortgage is quite an undertaking. Thanks again!!
  • February 06 2012
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3.5% if the normal down payment for FHA. Call a few lenders to see where you stand on creditworthiness.
  • February 06 2012
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Define bad credit. 3.5% down for almost anyone.
  • February 06 2012
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Profile picture for Cindy Quinton
I can tell you that even with 20% plus down, virtually no debt, 17 years on the job, and excellent incone we couldn't get approved. I was advised to go to www.myfico.com and to read and learn about increasing credit scores.I took some of the actions they recommended. And a local lender also told me to get a couple of secured credit cards and we borrowed against a CD. Our lowest score has gone up over 80 points in two months. The folks on the forums at myfico have been very helpful. Good luck!
  • February 06 2012
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Profile picture for KKSka14
FHA guidelines are 3.5% down to 580 credit score. However, investor overlays have made it where it's very difficult to obtain an FHA loan with a score under 640. My group will do an FHA portfolio loan to a 620 credit score with 10% down. So each lender will have its own overlays that will determine down payment based on credit score. Call a local lender.
  • February 06 2012
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Profile picture for Cindy Quinton
What does bad credit mean, as in what are your scores and how did they get that way?
  • February 06 2012
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