2017 FHA Loan Guidelines
FHA loans are one of the more popular types of mortgages loans in 2017. They are easier to qualify for because they don’t require a huge downpayment and have low credit score guidelines. They’re great for first-time home buyers, but everyone is eligible for an FHA mortgage.
FHA Credit Guidelines
The Federal Housing Administration will insure a mortgage if the borrower has at least a 500 credit score with a 10% down payment. However, mortgage lenders do not have to follow the FHA guidelines and they typically have their own minimum credit rating requirements.
A 620 FICO score is generally the minimum score most lenders will allow. There are some lenders that are able to work with a credit score as low as 580 will just a 3.5% down payment.
Know Your Credit Score
You should know what your credit score is. There are several websites that give you your free credit score and report. Credit Karma and Credit Sesame just to name a few will not only give you your score and report free once a month, but also send you credit alerts anytime there are changes on your credit profile.
FHA Credit Requirement
The FHA Guidelines on the minimum Credit Score needed by a borrower to insure a loan is 580. The majority of FHA Lenders require between a 620 and 640 score for FHA mortgages.
FHA Loans require a minimum downpayment of 3.5% if you have a credit score of 580 or higher. If you have a score of 500-579 it may be possible to get approved with 10% down.
When applying for a mortgage, not just FHA, but any loan you’ll need to prepare several documents for your mortgage lender. W2’s, tax returns and pay stubs just to name a few. Click here to see all the documents you’ll need for a mortgage loan.
Conventional vs FHA Loans
We compare the Pros and Cons of both conventional and FHA loans. FHA Loans are easier to qualify for and require a low downpayment while conventional loans could save you money over the course of the loan.
FHA Closing costs
Typically the lower your credit score is the higher your closing costs will be. You can expect to pay between 1-2% on average for closing costs.