New FHA PURCHASE Guidelines — Credit Scores below 600 now allowed with more down payment

 

From Steve SchraderBachar, Wells Fargo Home Mortgage

”The following Credit Policy enhancement is being made by Wells Fargo Home Mortgage for FHA Purchase transactions.

Credit Policy on or after Jan. 15

Minimum loan score and LTV allowed for Purchase transactions:

Loan score lower than 500 = not allowed

Loan score 500 – 579 allowed with maximum 90% LTV and the additional requirements listed below

Loan score 580 – 599 allowed with maximum 95% LTV and the additional requirements listed below

Loan score 600 and higher allowed with maximum 96.5% LTV

Additional requirements:

ALL of the following requirements apply for transactions with loan scores less than 600:

For Accept/Refer Credit Risk Class:

Accept: maximum ratios 31/43

Refer: maximum ratios 31/36 AND two months of Principal, Interest, Taxes and Insurance (PITI) reserves

For all Credit Risk Classes:

Seller contribution limited to 3%

Gift funds may NOT be used for the required 5% or 10% down payment

Note:

Borrower’s ability to accumulate funds for down payment must be evidenced by documentation in the loan file.

Down payment Assistance Programs (DAPs) may NOT be used for the required 5% or 10% down payment

There is no change to the minimum loan scores required for Rate/Term, Cash-out and/or Streamline Refinances.”

For more information, contact:

Steve SchraderBachar
Home Mortgage Consultant
Wells Fargo Home Mortgage
MAC N8277-011
910 East First Street
Ankeny, IA 50021
515.289.4381 Tel
515.360.5197 Cell
866.779.6727 Fax
Steven.w.SchraderBachar@wellsfargo.com
http://www.wfhm.com/steve-schraderbachar

About Les Sulgrove

Les is an Iowa native born in Des Moines and raised in the southwest Iowa town of Bridgewater. He has been a resident of Des Moines since 1982 and has been married to his wife Linda for over 35 years. Together they have 3 grown children, 6 grandchildren and make their home on Des Moines south side. He has been a licensed REALTOR® since 1990 and is a Broker Associate with VIA Group, REALTORS®. Les is the 2011 Past President of the Des Moines Area Association of REALTORS® (DMAAR) and received the award of Salesperson of the Year by DMAAR in 2007 for his involvement and service to the Association. Additionally, he is active at the Iowa Association of REALTORS® and serves on many committees. He also owns and operates the national technology networking group CyberProfessionals. This group of real estate professionals meets twice annually across the United States to learn from each other and share new marketing ideas with heavy emphasis on current and future technologies and their use in the real estate business. Les’ hobbies include golf and photography. He and Linda spend many Saturday mornings from Spring to Fall at the Des Moines Downtown Farmers Market. He enjoys spoiling his grandchildren at every opportunity.

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2 thoughts on “New FHA PURCHASE Guidelines — Credit Scores below 600 now allowed with more down payment

  1. Hi – nice article. The mortgage problem is STILL ridiculous – even more so in Vegas – I recently read that 71 percent of homes over there are under water! If this is the situation in a well-off city like Vegas, it really makes me worried… Anyhow, slick blog… I’m subscribed to your RSS feed now so thanks again!

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