HUD Department of Housing and Urban Development announced that there are new changes on FHA Single Family houses guide. FHA loans changes are effective on or after October 4th, 2010. This mortgagee letter changes the new minimum credit scores and Loan to Value Ratio LTV requirements for FHA insured loans.
Here is the Summary of FHA Guidance on Minimum Credit Scores and LTV Requirements
- Borrowers with a minimum decision credit score or above 580 are eligible for maximum financing.
- Borrowers with a minimum decision credit score between 500 and 579 are limited to 90 percent LTV.
- Borrowers with a minimum decision credit score of less than 500 are not eligible for FHA insured mortgage financing.
- Borrowers with a nontraditional credit history or insufficient credit are eligible for maximum financing but must meet the underwriting guidance in HUD 4155.14.C.3
- Borrowers using 203(h) Mortgage Insurance for Disaster Victims are eligible for 100 percent financing and no down payment is required, provided that the borrowers have a minimum credit score of 500(borrowers with decision credit scores below 500 are not eligible for FHA financing.
These new requirements are applicable to all Single Family programs except Title I, Home Equity Conversion Mortgages: HOPE for Homeowners: Section 247: Section 248: Section 223(e) and Section 238.
The other good news is that as of OCTOBER 4th
FHA has REDUCED the UP FRONT MORTGAGE INSURANCE to 1%.
MONTHLY INSURANCE will NOW be .85%.
THIS is a REDUCTION OF 1.25% ON the UP FRONT FEE.
These FHA loan changes will affect Dallas Real Estate Market, if you need more information regarding Dallas Homes for Sale, Frisco Homes for Sale, Dallas Condos for Sale, Plano Homes, McKinney Properties and surrounding areas, feel free to reach me.