FHA Credit Requirements
Most lenders now require a minimum 620 credit score in order to qualify for an FHA loan. However, a few are still underwriting at scores below 620, but you must be very strong in other areas and you should expect to pay a higher interest rate.
If your score is above 700, you may be able to get a better rate.
If you have had a hard time with your credit in the past, FHA does allow some flexibility with FHA Credit Requirements. Here are a few things to take into consideration:
Bankruptcy: You must be 2 years past your bankruptcy with a perfect credit history since, and at least some re-established credit. If you filed chapter 13, you must be 2 years past the file date, but must be discharged from the bankruptcy.
Foreclosure: You must be 3 years out of a foreclosure in order to qualify for FHA financing.
Short Sales: Short sales are considered a foreclosure by a lender, unless you were current on your mortgage at the time of the short sale.
Judgements: Most of the time, judgements must be satisfied in order to qualify.
Tax Leins: Must be paid off if Federal, and must be either paid off or entered into a pay plan with 12 consecutive on-time payment with no lates if State.
Deliquent Federal Debt: You cannot qualify for an FHA loan if you have any derogatory Federal debt.
Collections: Small collection that are older than 24 months old generally do not have to paid off. Most medical collections do not have to be paid off. However, this is an underwriter's call, so you may be asked to pay off collections to qualify.
Late Payments: Most lenders want to see a credit history with no late payments for the past 12 months, but if your other qualifying factors are good, you may be OK with one or two late payments. Late mortgage payments are not acceptable.
Forebearance: Forebearances are looked at as a deliquent debt, even if payments aren't late, so especially in the case of student loans, you cannot qualify for an FHA Mortgage with a loan in forebearance.
To get started with your FHA Mortgage, simply select the scenario that best suits your needs:
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