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FHA Loan Reader Questions: Credit Scores for Co-Borrowers

December 23, 2014

109A reader asks, “Hi wanted to know if my gf has income and a co signer or co borrower can see be able to get an FHA loan if her credit ain’t high but the co person is high.”

The answer to this question may depend greatly on the lender, the circumstances, and whether the borrower has compensating factors that might offset a lower FICO score. FHA loan rules spell out minimum credit scores and the lender will also have minimum credit score requirements which must be met.

The FHA loan rulebook, HUD 4155.1 in Chapter Four has rules which spell out some standards for credit for all applicants, co-borrowers, etc. Chapter Four says in part:

“If a credit score is available, it must be used to determine the decision credit score for the application and for eligibility for FHA-insured mortgage financing. A “decision credit score” is determined for each applicant according to the following rule: when three scores are available (one from each repository), the median (middle) value is used; when only two are available, the lesser of the two is chosen; when only one is available that score is used.”

Furthermore, FHA loan rules say:

“When determining the creditworthiness of borrowers, coborrowers, or cosigners, the underwriter considers their

• income

• assets

• liabilities, and

• credit histories.”

So depending on these factors the lender may or may not be willing to work with a borrower and a co-borrower. Credit scores are important but they are only one part of the picture–the borrower’s payment history and other factors also play an important part in loan approval or denial.

Do you have questions about FHA home loans or refinance loans? Ask us in the comments section. All comments are held for moderation and approval.


Joe Wallace - Staff Writer

By Joe Wallace

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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