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Home » Resources » Articles And Reports » Legislative Updates » 2014 FHA Loan Requirements

2014 FHA Loan Requirements

FHA minimum credit score is 500 to buy a house or refinance.

New FHA policy requires a minimum credit score of 500 to buy a house or refinance. Borrowers with a credit score above 500 are eligible for an FHA loan.

New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA 3.5% down payment. New borrowers with less than a 580 credit score will be required to put at least 10% down payment.

Borrowers with a score above 580 can refinance up to a 97.5% loan-to-value on a rate and term refinance. And up to 85% cash out refinance with a credit score above 580.

The FHA has taken the following step:

  • Update the combination of FICO scores and down payments for new borrowers
  • New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA’s 3.5% down payment program
  • New borrowers with less than a 580 credit score will be required to put down at least 10%
  • FHA loan requirements 2014

No credit history

Three lines of credit are necessary to apply for an FHA loan. However, in the event a borrower does not have sufficient credit on their credit report the FHA will allow substitute forms. FHA allows minimum trade lines if you have credit scores.

Late payments

During an underwriter analysis of borrower credit, the overall pattern of credit behavior is being reviewed rather than isolated cases of slow payments. If a good payment pattern has been maintained, regardless of a specific period of financial difficulty preceded it, the borrower may escape disqualification.

Collection accounts

FHA does not require collection accounts to be paid off as a condition of mortgage approval. However, FHA does recognize that collection efforts by the creditor for unpaid collections could affect the borrower’s ability to repay the mortgage.

  • If evidence of a payment arrangement is not available, the lendermust calculate the monthly payment using 5% of the outstanding balance of each collection, and include the monthly payment in the borrower’s debt-to-income ratio.

Chapter 7 Bankruptcy

At least two years must have elapsed since the discharge date of the borrower and / or spouse’s Chapter 7 Bankruptcy, according to FHA guidelines. This is not to be confused with the bankruptcy filing date. A full explanation will be required with the loan application. In order to qualify for an FHA loan, the borrower must qualify financially, have re-established good credit, and have a stable job.

FHA loan requirements 2014 minimum credit score to qualify is 500.

Source: http://www.fha-world.com/fha-loan-requirements-2014.html

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35 Responses to 2014 FHA Loan Requirements

  1. Monica Garcia says:

    Great information to know. Do these qualifications affect decisions for owner financing?

  2. Phillip Warrick says:

    Thanks for sharing…very valuable info

  3. Theodore Lloyd says:

    Same two year rule for a Chapter 13 bankruptcy? Or, are those treated differently?

  4. John Keffalas says:

    Does anyone know what the new VA mortgage requirements are?

  5. John Keffalas says:

    I thought FHA loans were for first time buyers only. Is this still true?

    • Ken Chavez says:

      If I remember correctly, FHA loans are not ONLY for first time buyers, but I don’t recall the specific criteria for other qualifying situations.

  6. Steve Rivkin says:

    FHA only allows you to hold one of their loans, first-time or tenth time. Wow the 500-580 category is really underadvertised. Will follow up on that thanks!

  7. Tom Holyfield says:

    no kidding!

  8. James Seal says:

    ok cool thans Ron

  9. Brian Chilcote says:

    Good to know for our cash customers. Thanks!

  10. Vanessa Blais says:

    What about income and debt-to-income ratios?

  11. Willis Wainwright says:

    who do we talk with at the bank about this program

  12. Debbie Magar says:

    I think with owner financing it would be whatever the owner decided they wanted to take, as credit score.

  13. Michael Adams says:

    GREAT INFO

  14. Harold Sherrill says:

    Thanks for the info on this.

  15. Nancy Shah says:

    good to know

  16. Roger Young says:

    Thanks Ron, great information on 2014 FHA Loan Requirements. The Chapter 7 Bankruptcy info will probably surprise some Chapter 7 Bankruptcy filers. It’s good to know so customers that think they don’t qualify can know the rules.

  17. Pedro Cooper says:

    http://www.fha-world.com/fha-loan-requirements-2014.html is a broken link. Where can I find the correct one?

  18. Niko Anagnostopoulos says:

    I wonder if an FHA loan is preferred to a conventional loan.

  19. Steve Shabkie says:

    Above 580 FICO your client can; as before; qualify for the 3.5 percent down payment program; Under 580 you client, will need 10% down-payment to apply. Check on non conforming; jumbo or conforming loans? and impounded account fees i.e. up front MMI cost and related loan FHA fees/insurance can be excessive.

    All the Best.

  20. Hani Ghali says:

    Thanks for this great information.

  21. Melvin Stevens says:

    What about for Chap 13 bankruptcy?

  22. Carlita Dorsey says:

    I just love the fact that you are a wealth of information. The link that you provided has been updated to the following link: http://www.fha-world.com/fha-purchase.html. This will give a person the exact page that gives the minimum credit score needed for different types of loans. Thank you again for the lovely information that you provide.

  23. Cholpon Yoder says:

    Thanks for sharing…good to know

  24. Keith Lanier says:

    Good info from Ron’s team!

  25. Fernando Diaz says:

    Do we have updated fha information. I understand that fannie and freddie also offer a 3.5% down payment program.

  26. Kendahle Lanier says:

    Great information

  27. Mark Hershberger says:

    If I read this correctly this information is from 2014. Do we have any current (2018) information and/or updates available?

  28. Robert Rowe says:

    Thanks Ron for the info

  29. Mike Dellarocca says:

    Thanks Ron! Is 2014 the latest update? Have there been any changes in the last 4 years?

  30. Bella Chartrand says:

    Awesome updates! Thanks, Ron. You cover everything here!

  31. Bella Chartrand says:

    Didn’t really read this…just needed an extra point for my Gold Club points because it didn’t calculate my comment I made after watching the 20 minute video;)
    PS. I’ve read it before, though, and it’s awesome how Ron stays on top of everything…just wish the computerized comments point counting system would do the same.lol

  32. Mike Dellarocca says:

    Can I obtain an FHA loan for an investment property or only my primary residence?

  33. Beresford Kirton says:

    Very good to know. Very useful.

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