Florida FHA home loan Below 580 FICO, OK!

Written by admin on April 26th, 2011

Florida homebuyers can qualify for an FHA Loan with A Credit Score below 580 FICO!

If you’re a Florida homebuyer has a credit score below a 580 it might be extremely hard to get a FHA loan in this current lending market. But there are other options for Florida homebuyers when it comes to getting an FHA loan. Even though a FHA loan will insure loans below a 580 credit score the secondary market that buys and sells mortgage paper has set the stage as to what will be bought and sold in this market.

When a Florida FHA home loan is bought and sold in the secondary market, investors set particular guidelines and purchase mortgage backed securities based on statistics. If they notice a segment of Florida FHA loans not performing well on the secondary market they determine which individuals are defaulting on the Florida FHA mortgage eliminate that guideline that is  causing the greatest default. So it’s essentially like watching your own stock portfolios performance. If that particular portfolio of yours is not doing well you sell the stock and purchase stocks that fit into your investment criteria. The FHA loan secondary market works the same way.

Over the last 6 to 7 years Florida FHA loan were being written for all types of Florida mortgage applicants with no minimum credit score requirements. Until recently there was never a minimum credit score requirement for an FHA loan. Most banks are requiring at least middle credit score of 580. There are exceptions to this rule. Some banks will allow a FHA loan to go through with a credit score below a 580 if the bank or mortgage company gets an automated approval. An automated approval is a piece of software that banks use that either says “yes” or “no”. Let’s assume you have a credit score of 578 and your loan file is ran through this software and it says ‘yes”, as long as that particular lender will allow a credit score below a 578 with a automated approval you are good to go.

Some Florida FHA mortgage lenders have internal rules for a FHA loan they will approve as well. So just because you have a credit score below a 580 does not mean all hope is lost for an approval of an FHA Loan.

If you have a credit score below a 580 here are some factors that could possibly help to get an automated approval for an FHA loan.

proof of Savings history in IRA, or other savings account 12 months on time rental history No late payments in the last 12 months Low debt to income ratios

These are all good compensating factors that will get your approved for a Florida FHA mortgage low credit scores.

If you have recently been denied for a FHA mortgage loan, get a recent copy of your free credit report and start negotiating down any collections. Most times creditors will settle these collections for less than 50 cents on the dollar. The higher your credit scores are the better terms you will qualify for in applying for a Florida mortgage. Bad credit does not fix it self you can repair your own credit and soon purchase a Florida home using an FHA home loan with only 3.5% down payment.
An FHA Loan can be a great solution for Florida homebuyers in today’s market.  For more information about getting an FHA loan in Miami, Orlando another Florida location contact us today.




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