It’s getting easier for home buyers to get approved for an FHA-backed home loan. Major lenders are now approving FHA mortgage applications for borrowers whose credit scores are 580 or better, a drop of 60 point as compared to last year, when FHA lenders required credit scores of 640 or better.
Minimum FHA Credit Score Drops 60 Points
It’s getting easier for borrowers to get an FHA-backed home loan.
Major lenders will now approve FHA mortgage applications for borrowers with FICO scores of 580. It marks a 60-point improvement over 2014, when FHA lenders required 640 FICO scores or better to get approved.
The news comes at a time when FHA loans are in demand.
The program’s 3.5% down payment minimum is among the most lenient for today’s home buyers; and underwriting requirements on an FHA loan are flexible and forgiving.
FHA loans account for close to one-quarter of all loans closed today.