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Summary – FHA Guidance on Minimum Credit Scores and LTV Requirement
In accordance with the final Federal Register Notice [FR-5404-N-02] on minimum decision credit scores and LTV ratios for FHA-insured single family mortgages, the new requirements are
Borrowers with a minimum decision credit score at 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 non-traditional credit history or insufficient credit are eligible for maximum financing but must meet the underwriting guidance in HUD 4155.1 4.C.3.
Borrowers using 203(h), Mortgage Insurance for Disaster Victims, are eligible for 100 percent financing and no downpayment 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.