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What Credit Score Do I Need For an FHA Mortgage?
Can you imagine the sheer disappointment of finding the home of your dreams, applying for an FHA loan only to discover your credit scores are too low? Believe it or not, this happens to many people, despite the low credit score requirements set by the FHA. If you’re considering getting an FHA loan, it will be beneficial for you to know not only what your credit scores are but also what they need to be for an FHA loan. Get the important facts below!

What Credit Scores are Needed for an FHA Loan?

When you apply for an FHA loan, the lender or FHA will request a copy of your credit report from one or all of the three credit reporting agencies. When the credit report shows three scores (one from each agency), the middle score is used. If it shows two scores, the lowest is used. If just one score is shown, that’s the score that’s used. The score that is used is called the decision score. The required scores may vary slightly if the borrower has untraditional credit (no credit history) or if they’re applying for other special loan programs such as Hope for Homeowners, etc. Typically, borrowers with scores of 580 or higher are eligible for the maximum financing allowed. If borrowers have credit scores of 500-579, they’re eligible for the maximum loan-to-value (LTV) 90% ((amount of loan compared to value of the home). Borrowers with credit scores under 500 are generally not eligible for an FHA loan.

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