New FHA Program For Credit Issues?

Anonymous · ‎07-24-2016

I was out looking at some new homes yesterday just to get a feel for what they cost in my area. I mentioned to one of the sales agents from Adam's homes that I was trying to go through the USDA and that I also have a VA certificate that I can use. We started talking a little bit about my credit. The sales agent wanted to know if I was aware of some new program the FHA has came out with for borrowers with a a little less than perfect credit. He seemed to think that if I used one of their approved lenders that I could get approved. I explained that my mortgage credit scores are not quite there yet. Currently they are 635, 613 and 595 (Trans Union). Trans Union should go up soon they are in the process of deleting some of tje negative accounts from my prior Bankruptcy. Info has not updated yet with credit bureaus. I am also fixing to either pay off or almost pay off my 3 credit cards to bring my utilization rate way down. It is hovering around 85% at the moment.

I though all FHA lenders wanted a minimum score of 640 or better? Does anyone know what this agent is talking about? My VA loan option would be an easier way to go from what I have been able to determine as far as paperwork and time frame for closing a loan. I don't want any hard pulls on my credit if I am wasting my time. I am waiting until September to give Trans Union time to finish fixing the incorrect items on my report. I have googled every bit of information I can find on FHA loans for credit problems and don't see anything regarding any type of new program.

sports1965 · ‎07-24-2016

some FHA lenders go all the way down to 500 but most want to see a 580 and 620 is even better

Anonymous · ‎07-24-2016

If you need better scores by September then you need to be paying down the 85% util now so that creditors have time to update the new balances to the cra's. That alone will raise your scores before you app for the mortgage.

StartingOver10 · ‎07-24-2016

@Anonymous wrote:
I was out looking at some new homes yesterday just to get a feel for what they cost in my area. I mentioned to one of the sales agents from Adam's homes that I was trying to go through the USDA and that I also have a VA certificate that I can use. We started talking a little bit about my credit. The sales agent wanted to know if I was aware of some new program the FHA has came out with for borrowers with a a little less than perfect credit. He seemed to think that if I used one of their approved lenders that I could get approved. I explained that my mortgage credit scores are not quite there yet. Currently they are 635, 613 and 595 (Trans Union). Trans Union should go up soon they are in the process of deleting some of tje negative accounts from my prior Bankruptcy. Info has not updated yet with credit bureaus. I am also fixing to either pay off or almost pay off my 3 credit cards to bring my utilization rate way down. It is hovering around 85% at the moment.

I though all FHA lenders wanted a minimum score of 640 or better? Does anyone know what this agent is talking about? My VA loan option would be an easier way to go from what I have been able to determine as far as paperwork and time frame for closing a loan. I don't want any hard pulls on my credit if I am wasting my time. I am waiting until September to give Trans Union time to finish fixing the incorrect items on my report. I have googled every bit of information I can find on FHA loans for credit problems and don't see anything regarding any type of new program.

If you have a VA COE then definitely go VA rather than FHA. The interest rate is usually lower AND there is no MIP. This saves you thousands each year and many, many thousands over the life of the loan.

VA even has fewer requirements than FHA. Please check into it. Not all VA lenders have the same guidelines though. Some are much better than others. If you need a referral to a great VA lender, let me know and i will pm one to you.

Anonymous · ‎07-24-2016

I second the VA recommendation. We looked at both VA and FHA and the VA loan was a much better deal for us. Not having to pay PMI allowed us to look at a wider range of houses. Our lender required a 640 middle score, but that was their own overlay. I believe there are VA lenders that go down to 620 or 580.

DallasLoanGuy · ‎07-25-2016

@Anonymous wrote:
The sales agent wanted to know if I was aware of some new program the FHA has came out with for borrowers with a a little less than perfect credit. He seemed to think that if I used one of their approved lenders that I could get approved.

.

there is no new fha program for people with less than perfect credit.

that salesperson lied to you

still going to buy their home?

Retired Lender

Anonymous · ‎07-25-2016

I thought he was an idiot and no I won't be buying from him. I dd email the mortgage group I contacted last year and they confirmed the minimum credit score is still 640 or above for their lenders. I will continue working on my score until I go VA. If by some chance USDA gives me a green light I will go that route.