FHA financing now available with a credit score as low as 500
On January 15, 2011, Wells Fargo lowered their credit guidelines to offer FHA financing to borrowers with credit scores as low as 500. This lower credit requirement should open the doors to many buyers who otherwise would not be able to meet most lenders’ credit requirements of minimum scores of 650+/-.
This new credit guideline doesn’t come without a catch. In order to finance borrowers with lower credit scores, Wells Fargo will be requiring higher than average down payments. For borrowers with credit scores of 600 or more, the required down payment will remain the same at 3.5%. However, for borrowers with a credit score below 600, the down payments requirement will be as follows:
Credit score 500 – 579: Minimum down payment of 10%
Credit score 580 – 599: Minimum down payment of 5%
These higher down payment requirements may restrict some would be buyers from entering the market, but it is welcomed news to many people ears after half a decade of very strict lender requirements.
Related Posts:
Rules for FHA Financing
Advantages of FHA 203k Renovation Loan
Understanding Your Credit Report and Score
Should you have any questions or need further information,
please don’t hesitate to contact me, (775) 220-1630
Or visit my website: www.SellingHomesinReno.com
Joshua Talayka
NAR designated: Short Sale & Foreclosure Resource
Chase International
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