FHA mortgages have always been an outlet for people with less than perfect credit scores. But what exactly does that mean? What Ohio FHA credit scores do you need to potentially qualify for a mortgage?
While FHA allows financing with credit scores as low as 500, banks that offer FHA financing are able to enforce stricter guidelines, and often do so. So what does the mean to you?
HUD published Mortgagee Letter 10-29 on September 3, 2010 updating the minimum credit score requirements to obtain an FHA mortgage.
640 or higher Ohio FHA credit scores
Most banks and lenders will offer FHA financing with a 640 or higher credit score. This would most likely be considered the gold standard, credit score wise, for FHA mortgages.
620-640 Ohio FHA credit scores
Fewer banks and lenders in Ohio offer financing with credit scores between 620 and 640. There are still a number that do, and generally these lenders do not treat the FHA mortgage process any differently than the lenders that require a 640 credit score.
580-620 Ohio FHA credit scores
It starts getting a little more difficult when your credit score is below a 620. Not only do fewer banks and lenders offering financing below a 620 score, FHA has stricter guidelines.
Ohio FHA sub 620 credit score requires your debt to income ratio to be under 43%
While there are a number of lenders that claim to offer FHA financing down to a 580 credit score, the fact of the matter is that many of the banks and lenders make it quite difficult to actually obtain an FHA mortgage with those scores. You should do your due diligence when first speaking with a loan officer.
Sub 580 Ohio FHA credit scores
FHA requires a minimum of 10% down payment (or in the case of a refinance, 10% equity) in order to obtain an FHA mortgage with credit scores below a 580.
Very few banks or lenders offer FHA financing with scores below a 580. And those that claim to, often times make it virtually impossible to actually get the loan closed.
Due to the difficulty in getting FHA loans in Ohio closed with less than a 580 score, I work with my clients to improve their credit scores, and thus improve their chances of obtaining an FHA mortgage. Sometimes this takes a month or two, and in some instances can take longer.
Credit scores are just one piece of getting approved for an FHA mortgage, usually a first step in determining eligibility. If you’d like to discuss your options for obtaining an FHA mortgage in Ohio you can contact me or complete the FHA mortgage Rate Quote form.
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