FHA loans

scooby21 · Joined: 02 Dec 2007 Posts: 5 Location: Richmond,VA

I'm new to this. My husband and I applied for a loan this summer-FHA. We were denied because of low credit scores. I had a few credit card collections that were unpaid. I have now paid all those off. I am in the process of trying to raise scores-scores now in the low 500's. We would like to apply again in the spring of 08. Any suggestions of what we should do? How likely are we to get an FHA loan?

chow · Posted: Sun Dec 02, 2007 10:12 am Post subject:

FHA doesn't require a credit score, and collections to be paid. The lender you went to- made those rules. (which they can). I would call a few others abd discuss the situation-see who had manual underwriting and have them try to help you.

sithburns · Joined: 12 Nov 2007 Posts: 20

Yes I agree. You should not have problems with FHA due to credit scores. You just went to the wrong place initially.

With FHA it's all about three thigns:
1. numbers - do they make sense
2. Story - explenation for bad credit make sense
3. Compensating factors - Does the good help outway the bad

You should not have a problem if the only reason they declined you was due to scores. I see correspondent lenders imposing their own underwriting standards on FHA loans such as a minimum 500 credit score. This is NOT FHA guidelines and you need to go to someone that does manual underwriting and follows the actual standards FHA has set forth.