Credit Score

FHA loans

FHA allows borrowers with a credit score above 580 to make a 3.5% down payment and up to 6% seller concession to purchase a home.

If you have a credit score below 580 new FHA changes require a 10% down payment. The funds can be a gift from a family member and up to 6%, seller concession is allowed.

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 FICO score above 500.

If your score is below 580 new FHA changes require a maximum loan-to-value of 97.75% for a rate and term refinance. And up to 85% cash out refinance with a minimum FICO score of 500.

Conventional loans

Conventional loans require a minimum credit score of 620 to buy a home or refinance. A borrower must have a minimum of 3% down payment to be eligible for a conventional loan.

A common reason for refinancing is to lower your monthly payments by eliminating private mortgage insurance. Conventional loans with a loan-to-value of 80% or below do not require PMI.

Fannie Mae has introduced their latest HARP, which requires no minimum credit score and allows you take advantage of current market rates even if you are underwater. Take advantage of the Home Affordable Refinance Program and lower your monthly payment or term using the streamline Fannie Mae process.

VA loans

VA loans allows veterans to buy a home with no money down with a minimum score of 500. VA guidelines allow a veteran buy a home using their own funds, gift funds and up to 4% seller concession for closing cost.

USDA loans

USDA loans require a middle credit score of at least 580. The home to be purchased must be located in an eligible rural area as defined by the USDA. Income eligibility for the USDA Rural Development home loan program is derived from calculating 115% of the counties median income.

Near-Prime loans

Near-Prime loans are loans that do not conform to Fannie Mae or Freddie Mac Guidelines. Jumbo loans are Near-Prime loans and require 10% down payment up to 1 million dollars with no mortgage insurance and 20% down payment up to 3.0 million.