Another week, another change in underwriting guidelines – but this time it just got easier to get a mortgage if your credit score is 630.
Effective immediately, the minimum credit score for an FHA purchase mortgage is now 620.
A few conditions that must be present for these loans include:
- Maximum PITIA may not exceed 33% of total qualifying income
- Maximum total monthly obligations including PITIA may not exceed 45% of total qualifying income
- Rescoring borrower to raise FICO to meet parameters is not acceptable and not allowed
- 2 months of reserves will be required covering 2 full months of PITIA for subject property
- Gift funds are not allowed for down payment, closing costs, prepaids, reserves or any other purpose (i.e. debt pay offs)
- Price hits for this FICO range will be administered and disclosed by Secondary on the rate sheet.
- Not eligible for Refinance transactions
- Not eligible for ARM’s
- Not eligible for non-occupant co-borrowers
- Not eligible for the FHA 203K loan programs
- Not eligible for flips that fall into the 0-90 day time frames
- Not eligible on 2, 3 or 4 unit properties (only eligible property is 1 Unit primary residence)
If you are in a situation where you have a credit score that is between 620 and 639 and other lenders have told you that their minimum credit score is 640, then now is the time to pick up the phone and speak with one of our Arizona loan officers.