{"id":689,"date":"2014-10-10T15:47:26","date_gmt":"2014-10-10T15:47:26","guid":{"rendered":"http:\/\/teammovemortgage.com\/2014\/10\/10\/approving-fha-loans-with-only-1-credit-score-or-no-credit-scores\/"},"modified":"2020-07-13T22:37:27","modified_gmt":"2020-07-13T22:37:27","slug":"fha-minimum-credit-score","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/fha-minimum-credit-score\/","title":{"rendered":"Minimum Credit Score for FHA Loans Are Lower Than You Think"},"content":{"rendered":"

FHA already has the reputation of being a forgiving and flexible home loan.  But many lenders actually place higher limits on the minimum credit score for FHA loan files.  The Federal Housing Administration <\/a>allows lenders to use good judgment in determining loan approval.  Although credit scores do play a role in an FHA loan approval.  So let’s discuss the minimum credit score for FHA loans and how to get approved with a lower score!<\/p>\n

Minimum Credit Score for FHA<\/h2>\n

If not able to use a VA<\/a> or USDA<\/a> no money down purchase loan, FHA could be the next best thing.  In addition to a low 3.5% down payment, FHA also allows for down payment assistance.  Down payment assistance <\/a>programs bridge the gap between the price and the loan amount.  Although DPA <\/a>programs usually have a little higher credit score requirement.  For instance, SC Housing <\/a>and NC Housing Finance Agency<\/a> require a 640 score.  But our minimum credit score for FHA without DPA is only 600.  Keep in mind though, a 600 credit score does not mean automatic approval.  Usually there is a reason for the 600 score and so this requires a knowledgeable lender to walk you through the process.  Remember, credit scoring is a starting point but approval is possible with explanations, compensating factors, and good credit.<\/p>\n

[av_button_big label=’You Can Buy a Home with an Old Charge Off’ description_pos=’below’ link=’manually,http:\/\/teammovemortgage.com\/blog\/2016\/05\/18\/you-can-buy-a-home-with-an-old-charge-off\/’ link_target=’_blank’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ custom_font=’#ffffff’ color=’theme-color’ custom_bg=’#444444′ color_hover=’theme-color-subtle’ custom_bg_hover=’#444444′]
\nLearn how this works by clicking here
\n[\/av_button_big]<\/p>\n

Using Alternative Credit on an FHA Loan\"minimum<\/h2>\n

A good thing about an FHA loan and our underwriters is that not all credit must show on the credit report.  So let’s say that a buyer has a 620 credit score and only has 1 auto loan<\/a> reporting recently on credit.  If this one trade line has been paid as agreed, alternative credit could help.  Supplementing other credit references not normally reporting to credit bureaus could aid in loan approval.  There are a lot of alternative credit references buyers could prove such as below<\/p>\n