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WHAT IS THE MINIMUM CREDIT SCORE REQUIREMENT TO QUALIFY FOR FHA LOANS
I know that FHA loans are the best loan programs for borrowers with bad credit and low credit scores. What is the minimum credit score requirements to get approved for FHA loans.
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1 Reply
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HUD, the parent of FHA, is the federal government giant that administers FHA loans. HUD has lenient guidelines on FHA loans. The minimum credit scores for FHA loans are as follows:
580 or higher: You can qualify for a 3.5% down payment according to the standard.
500 to 579: A 10% down payment is required.
However, additional lender-imposed minimum requirements may be known as “lender overlays.” Many people with low credit ratings prefer FHA loans because they have more relaxed qualification standards. Even though HUD sets the minimum FHA credit score requirements, each mortgage lender can have their lender overlays. Lender overlays have higher lending requirements than the minimum HUD agency mortgage guidelines. Therefore, if one lender denies you an FHA loan because of a low credit score due to their lender overlays, a different lender can approve you. Gustan Cho Associates has no lender overlays on FHA, VA, USDA, and Conventional loans.