Are the banks starting to relax on FHA minimum FICO?

[Anonymous]

Guy at Wells Fargo told me the other day he could now get us approved with a 600 mid score.

[Anonymous]

I read an article about that.... apparently Wells Fargo will do scores in the 500's, with a bigger down payment. But if it's 600 or better the down payment will still be 3.5% for FHA. I almost got approved for a mortgage in December with a score of 603, but was denied due to some other factors. I think their underwriting might be a little bit stricter than some other banks even though they accept lower scores.

[cdtotten]

In my experiences buying home via FHA (2 in the past 5 years) and as a bank auditor, it seems that the minimum score requirments usually fall between 620-640. Those are not strict limits... someone with a lower FICO score can overcome that with good reserves, low DTI, etc. Each lender sets their own standards as well it seems.

[Anonymous]

Still sitting at 621/659/???...

Will WF be more forgiving with us on a 203K refi where it looks like our monthly payment is only going to increase by about $150/month and its been 5 years since our last late on our mortgage? Our current problem is a bunch of lates in 2005/2006 because of a job loss, high utlization (about 61% right now) and a few lates about a year ago..

[Anonymous]

if you have a history of lates (it appears you do) they are less likely to be so.  If low score is caused by one traumatic event or situation they are more willing to overlook things.  If they can see 2 or 3 times throughout the last 7 years on your CR where things have caused you to get behind that concerns them.  Also, the key if your FICO is low is low DTI and high reserves.  IF you are going in at 605 FICO trying to get approved at max DTI with minimal down and zero reserves chances are pretty slim it will go all the way through (no matter wha the LO tells you)  Always keep in mind that a great LO will be very frank with you.  A poor LO will tell you anything you want to hear to get you to apply just on the off chance they can slip you through and make money on you.

[Anonymous]

And no, the banks are not getting less restrictive.  Wells Fargo and a few other banks never stopped doing 600 loans completely, but they are few and far between that get approved.  In the same vein that alot of the banks that "require" 640 will still do a 620 loan under the right conditions.  That in no way means that someone with 620 can easily get a loan there.

[Anonymous]

Looks like the DTI will be about 40.7% if I am using the right numbers to calculate the mortgage payment..

30 year.. $165K mortgage, guessed 5.5% on the 203K.. payment of about $1350?

[Anonymous]

 We had a lot of problems in 2005/2006 after a job loss, ended up with stuff 90 days late, but by early 2008 were able to refinance.. since then, mortgage and autos have been perfect, 7 of the 9 CC's perfect.. but we got unorganized and forgot to pay 2 CC's in early 2010.. so I am assuming we will be in good shape?

[ShanetheMortgageMan]

More and more FHA lenders are starting to do lower scores, even down to a 500 score, but it doesn't mean that someone with a lower score automatically qualifies - everyone's situation is still taken at their own merits.  Scores below 600 are not given much leniency when it comes to debt ratios, negative credit, or a big increase in housing payment... basically people with lower scores have to be better qualified (other than credit score) than those with higher scores.

[Anonymous]

So with a mid of 621 (could be higher depending on EX) and DTI right around 41%, only a couple of CC lates (30, 60) in last 5 years with great job history (same field 19 years)... below or above average shot?