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Many lender to raises FHA min score Oct 4th

FYI: many lenders are raising their minimum score to get an FHA loan to 640 on October 4th.  Anything submitted between today and October 3rd can still be a 620-639 score.

Hope this helps
Paul
  • September 24 2010 - Tremont
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Answers (4)

Heck I thought the big change with FHA on 10/4 was that UFMIP is dropping to 1% and the MMI is going up from .55% to .95%

Hud is putting in a min FICO on the 4th but it's not 640, Any change to a min fico of 640 is a lender over lay not an FHA change
  • September 24 2010
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This could be potentially harmful to the market place.  Taking 1/3 chunks of potential buyers out of the market only slows an already sluggish housing market.  I understand assessing risk, but there are good buyers out there that are just establishing credit that haven't reached the 640+ mark.  And what about the first time home buyers using a grant or bond down payment assistance program?  Those type of buyers aren't quite the 640 level of borrower.  What if they (large correspondent lenders) decide to make the minimum 660? 

This is not where we need to be headed.
  • September 28 2010
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FHA established credit scores are not always what a lender will consider their minimum. Many Lenders are establishing their own minimum scores and they are usually higer that what FHA requires. This is to help reduce the risk factors in having to buy back the loan. 
Effective with case numbers issued on or after 10/4/10 the
MIP for FHA with LTV >95% is 0.90%
LTV < 95% is 0.85%
  • September 28 2010
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It's ridiculous that FHA is still lending with less than 5% down. Just setting us for the same thing we are in now.
  • September 28 2010
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