News, Credit score below 500? No FHA home loan (approve, requirements, lend)

[JD59]

NEW YORK (CNNMoney.com) -- The once wide-open doorway to homeownership closed a teensy bit more this week when a key government agency announced a proposal to no longer allow mortgages for borrowers with very low credit scores.

Sub-500 FICO? No FHA loan for you - Jul. 16, 2010

[Ceece]

500 is pretty low. I wouldn't lend money to anyone with a score like that.

[VictorBurek]

Most lenders already will not approve a loan with a fico score under 620. Some lenders have a minimum score requirement of 640. I only know of 1 lender that will go down to a 580 score.

[chet everett]

Below 500 !?!?!?!!!!

Do you have any idea how awful one's credit would have to be at that score?

Even in the freest lending days of the bubble a lender would have to be positively beyond reckless to think that a borrower with a FICO that low would have any likelihood of repaying...

I doubt any significant number of such loans ever were made.

[naeem5]

Originally Posted by VictorBurek

Most lenders already will not approve a loan with a fico score under 620. Some lenders have a minimum score requirement of 640. I only know of 1 lender that will go down to a 580 score.

VictorBurek confirms my experience.
I went to 9 lenders and tried Homepath, etc.
All needed a minimum score of 620.

But score is not all of it.
My score was 744, but DTI bit me harder than my credit score.

[evilnewbie]

Only goes to prove that government can do some stupid things when they have the will to do it... mandate the FHA to give loans to sub-500 FICO borrowers... uh.. stupid comes to mind... I wonder why politicians pander for votes like this at taxpayers expense...