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Middle Score 606, is a FHA 3.5% down mortgage available?

Hi, and thank you for your time.  The middle score is a 606.  After a long hard road, all the negative debt has been paid and finally got the score to raise a bit.  Is it possible that an FHA loan can be approved for a score like that?  I know, debt to ratio income, etc, I am just trying to decide if it is worth going forward or continuing to rent. :(

Thanks again!
Christy
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October 25 2013 - Noblesville
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There are lenders who will accept your score but they normally asked for additional requirements. Some of them will even require higher down payment. Ask for a good referral. Good luck!
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October 27 2013

Christy,

Well done on getting your credit under control.  Keep on this track and your scores will soon be over 700!

FHA lenders come in all stripes.  We have programs at 580+, but they require that you be able to prove your housing payment history with a cancelled check or a verification of rent from a management company.  IN addition, they are going to require that you have your own funds of at least 3.5% of the purchase price into the deal.

In addition, if your score was hit due to a collection, short sale, foreclosure, or bankruptcy, you may not qualify if these criteria are not satisfactorily met.

If you are calling around and discussing with other lenders, find out:
1.  How many FHA loans have you done under 620?
2.  What additional "Overlays" are required beyond FHA's requirements?
3.  What are the credit requirements aside from score?
4.  What is the rate?

You may be better off taking another month or so and work on your score to get it over 620 so that you can meet a lot of lender's standard FHA program.  You will get a better rate to boot.

If you are looking in VA, PA, MD or FL, I may be able to assist.

Good luck.

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October 25 2013
Yes, that is an acceptable score for an FHA loan although some lenders have overlays that may require a higher score.  Keep calling around until you find a lender that allows it.  What State are you in?
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October 25 2013
Well your score is actually acceptable with some lenders. For example, lenders like myself are able to give out loans with scores as low as 580. So since you are above that you may have a better chance. Also, I'm sure you already know this but your ability to obtain a loan relies on other factors as well. These factors include your income, expenses, assets, liabilities, debt, employment, down payment, as well as your credit score. if all of this are in line, you will have a much better shot at getting a loan. Either way, I recommend that you speak with a lender. There are lenders like myself that would be happy to speak with you to help you get the loan that you need. Well I hope this helps! So if you have any other questions or need a loan please contact me through the information on my profile page. I hope this helps and good luck!
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October 25 2013
The automated underwriting systems are not approving many loans under 620. True it is "possible" with compensating factors and the right lender but I have seen some strong borrowers under 620 get denied through the automated systems even with lots of reserves and low debt ratios. A good loan officer can see if you are approved through the automated system and also analyze your credit score to see if there's an opportunity to pay down some credit cards to increase your scores through a score update. Most of the time the reason why the score is low is the main issue. You should have ideally 3 active positive credit accounts on your history that have been paid on time for 12 months and no active derogatory unpaid accounts if possible for a strong profile. Good luck and I hope it works out for you. I'm only licensed in CT but am happy to give advice.   
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October 25 2013
We are a National lender that can Approve down to a 600 Fico. Please visit my profile for more information.
Good Luck in your search.
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October 25 2013
Yes. I have a local lender, out of Zionsville, who is able to approve down to 580 as well. Go to my profile to get number and email.
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October 25 2013
Yes, we offer FHA financing down to a 580 with 3.5% down, with normal rates!

Contact me through my profile if you have questions.

We are a Federally Chartered Bank that has been open since 1905 and lends in all 50 states!

Good luck!
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October 25 2013
 
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