FHA mortgage loan approvals with limited credit or low credit scores

low credit scores on fha loansLow Credit Scores Can Get Approved

Today there are many prospective homeowners with low credit scores, higher debt to income ratios, or limited credit experience.  This can make it difficult to obtain a mortgage loan to purchase a home.  Potential homebuyers do need to prove their ability to pay a mortgage on-time in order to get a mortgage loan approval.  We have investors for FHA loans that will lend to buyers with these characteristics.

Actual examples of recent FHA purchase closings

  • FHA loan with a 581 middle credit score.  So buyer was able to close with less than a 600 credit score but had other compensating factors.  It is difficult to get approved under 600 though
  • FHA loan with a 55% debt ratio.  The buyer had a higher debt ratio but had compensating factors including a high credit score, credit experience over a long period of time, and a solid income
  • FHA loan with very limited credit.  If we are able to get an automated pre-approval for someone that may only have 1 or 2 items reporting on their credit report, we have investors that we could close an FHA loan for.  If a borrower has very limited credit like this, it needs to be good credit and not 1 good item with several collections for instance and it helps if the borrower is able to prove a good rent payment history.

Keep in mind that FHA loans do have some leniency in their guidelines but it always helps to have the best credit possible to increase the chance of loan approval and to have more loan options to choose from.  To learn more about FHA loans, click here.

Team Move lends in areas such as Wilmington, Leland, Hampstead, Jacksonville, Camp Lejeune, Whiteville, Shallotte, Southport, Elizabethtown, Lumberton, Fort Bragg, Pope Air Force Base, Fayetteville, Rockingham, Raleigh, Garner, Smithfield, Clayton, Goldsboro, Charlotte, Greensboro, Winston-Salem, Durham, Chapel Hill, Burgaw, Castle Hayne, Holden Beach, Supply, Ocean Isle Beach, Sunset Beach, Hubert, Tabor City, Carolina Beach, Kure Beach, Laurinburg, Topsail Beach, North Topsail Beach, Surf City, Sneads Ferry, Richlands, Wrightsville Beach, New Bern, Oak Island, Saint James, Wallace, Sanford, Pittsboro, Apex, Cary, Raleigh, Holly Springs, Fuquay Varina, Siler City, Southern Pines, Aberdeen, Pinehurst, Whispering Pines, Vass, Spring Lake, Fayetteville, Lillington, Hope Mills, Dunn, Angier, Smithfield, as well as the rest of NC.  North Myrtle Beach, Myrtle Beach, Conway, Loris, Little River, Longs, as well as the rest of South Carolina and Virginia.

Written By: Russell Smith