What’s the Minimum Credit Score required for FHA mortgage approval?

SELF EMPLOYED MORTGAGE LENDERS QUESTIONS AND ANSWERSCategory: FHA QuestionsWhat’s the Minimum Credit Score required for FHA mortgage approval?
Thomas Martin Staff asked 5 years ago

What’s the Minimum Credit Score required for FHA mortgage approval?

The FHA mortgage applicant is not eligible for FHA-insured financing if the Middle Credit Score is less than 500.
If the Middle Credit Score is between 500 and 579 the FHA mortgage applicant is limited to a maximum loan-to-value (LTV) of 90%.
If the Middle Credit Score is at or above 580 the FHA mortgage applicant is eligible for maximum financing.

The FHA mortgage lender must downgrade and manually underwrite a mortgage that received an Accept recommendation if only the non-occupying co-FHA mortgage applicant has a bad credit score.  FHA mortgage applicants with non-traditional or insufficient no credit score are eligible for maximum financing, but must be manually approved by the FHA mortgage lender.

The Middle Credit Score refers to

• The middle score where three differing scores are reported
• The credit score reported on the FHA mortgage applicant’s credit report when all reported scores are the same.
• The lowest score where two differing scores are reported

An Middle Credit Score is determined for each FHA mortgage applicant. Where the mortgage involves multiple FHA mortgage applicants, the lender must determine the Middle Credit Score for each FHA mortgage applicant, and then select the lowest Middle Credit Score for all FHA mortgage applicants.  Where the mortgage involves multiple FHA mortgage applicants and one or more of the FHA mortgage applicants do not have a credit score (non-traditional or insufficient credit), the lender must select the lowest Middle Credit Score of the FHA mortgage applicant(s) with credit score(s).   The FHA mortgage lender must review the credit report to determine the FHA mortgage applicant’s Middle Credit Score, except for mortgages to be insured under Sections 247, 248, Streamline Refinances, and Assumptions.

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