NO!  FHA will insure loans with credit scores as low as 300.  Whether you have a high FICO score or a low one, you may qualify for an FHA loan to purchase a home. 

Even if you do not have a credit score, you can qualify for an FHA loan.  When you don’t have a FICO score, we use alternate methods to establish your credit.  That means that your rent payment, phone bill, gas or even your electric bill can be used to establish a credit score for you.  So if you pay on time for these other bills, you too may qualify for an FHA loan.

When you have poor credit, lenders will look at other “compensating” factors to show that you are a good risk.  So if you’ve had credit problems in the past such as a foreclosure, bankruptcy, reposession, and late payments, you must show that you’ve turned over a new leaf.  How do you do this?

If you’ve paid everything on time for the last twelve months, you may qualify for an FHA loan with a low credit score.  If you have more than just your down payment, you may qualify for an FHA loan with less than good credit.  If you have a steady job history, you may not need a great credit score.  Showing that you are taking financial responsibility will show the lender that you are a good risk, and FHA may insure your loan even with a low FICO score.

Do you have less than perfect credit?  Would you like to qualify for a home?  Do you have steady employment?  We can help you qualify for an FHA loan.  Call us today for a free analysis and prequalification.  We can look at your job history, payment history, income, and savings to let you know if you can qualify for an FHA loan.

FHA offers the most financing of any program. By putting down a minimum of 3.5% you can own your own home. The money used for the downpayment can also be a gift from a family member or relative such as a mom or dad, brother or sister, aunt or uncle, son or daughter, or cousin. So if a relative wants to give you a downpayment on your home as a present, it can be done.

FHA loans also offer the benefit of seller-paid closing costs. That means that the seller can contribute up to 6% of the sales price towards your closing costs such as title and escrow charges.

You don’t have to be a first-time homebuyer to use an FHA loan either. FHA loans are used to buy a primary residence only. That means you have to live in that home after you buy it. It cannot be used to rent out or as a second or vacation home.

FHA will insure mortgages up to a certain dollar amount, depending on the area. For example, in Los Angeles, FHA will allow a loan amount on a one unit, single family residence up to $729,750. Santa Barbara, San Francisco, and Santa Ana also have the loan maximum of $729,750 for a one unit home. If you are buying a home in San Diego, FHA will allow you to get a loan up to $697,500. You can find information on a specific county by going to the HUD website at https://entp.hud.gov/idapp/html/hicostlook.cfm.

So if you want to buy a home with the lowest downpayment, FHA is the way to go.

To apply for an FHA loan or to learn more about FHA mortgages, contact us today. We are the experts in FHA.