If you’re considering the purchase of an existing or new home (even a Manufactured or Modular home) you may have hit the target center if you choose an FHA mortgage loan. Why you may ask? Well, here are some FHA mortgage loan facts for you to ponder. Several years ago the acceptable FHA credit score required hovered around 600 which opened the doors for a possible return to what happened to lenders years back. That said, its pretty much common knowledge that FHA has always been the one financing guarantor (they don’t make loans they just guarantee them) folks could depend on where credit scores were not a factor. Recently, that promise was tossed out the window.
The FHA requirement started at 500, then moved to 550 and now several FHA approved lenders require 580 scores. However, in April the FHA credit score range was moved from 580 to 620. In 2015 lenders may balk at any score that is less than 640 but you can still find them at 620 or less if you can produce a valid “mitigating factor” that we’ll get to in a moment.
If you are already an FHA loan recipient and own a home, if you want to refinance using the FHA Streamline Refinance program you’ll be happy to know that you can still do a refinance if you have a 12 month payment history with NO late payments. You can then enjoy no employment nor income verification, no new appraisal and no credit verification of any credit scores.
In the final analysis, if you can’t qualify for a conventional loan, have nothing to write home about credit scores and not many funds for a down payment, you should check the current statistics on an FHA loan. However, be cautious of the loan limit factor which is $271,050 for single family homes or as much as $625,500 in major high-cost cities. So if you can keep your loan ratios under 47 or 48 percent, prove you have 12 months of job tenure and pay utility bills promptly, you’re a possible FHA homeowner.