May 11, 2015
A reader asks, “Can you advise if I can obtain a loan with a credit score of 564. I want to purchase a mobile home”
This is such a common question–many borrowers want to know if their FICO score is good enough to qualify for an FHA home loan. The answer is that it all depends on the lender. FHA FICO score minimums, as published in the FHA loan rules in HUD 4155.1, technically allow a borrower with a FICO score above 500 to apply for an FHA loan.
Borrowers with FICO scores below 580 but above 500 do not qualify for maximum FHA financing–these applicants would be required to apply for a loan with a higher down payment than those applying for a loan with FICO scores above 580.
But will a lender actually work with a borrower who has a FICO score between 500 and 580? Or even 600? That depends on a great many things. Ask many lenders and you’ll find a minimum standard of between 620 and 640; but this does not mean a borrower is automatically shut out of an FHA home loan.
Finding a lender willing to work with your credit score is key and there is no one-size-fits-all answer in cases like these. A borrower who technically qualifies for an FHA loan still has to meet his/her chosen lender’s minimum standards, also. Those standards may be higher than the FHA loan program’s stated minimums, and that is permitted under the FHA loan program.
Borrowers with credit scores below 620 should be prepared to shop more aggressively for a lender given that there are many who won’t accept FICO scores below that level.
Do you have questions about FHA home loans or refinance loans? You can ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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