Can We get a FHA mortgage with score 640? our Realtor says NO!

[Veronica Perez]

Hi Everyone!

I'm a little confused with this, I asked our Realtor if we can buy a property with the FHA mortgage and with 640 credit score because I found a property (a duplex for 175,000 000) that could be good for our first investment he says that we need at least 695 or 700 to get the mortgage but I had read in one of your blogs that that can be possible with at least 620 or something like that . We are going to have an appointment with our bank to try to get the mortgage we are looking for but I'm afraid that they will say No as well can We try anyway or should we wait to work with the score to get it higher?

Greetings! 

[Joel Owens]

People need to understand that guidelines are minimums.

So for example FHA could say 580 is the minimum which means lenders can't go below that for example. It doesn't mean 100% of the lenders are going to adopt that practice. You might find 80% will not do anything less than a 640 credit score etc.

So it's at the discretion of the lender if they want to go down to the lowest allowable score per federal guidelines of if they feel safer at something higher. Your credit score is just one component of underwriting for loan approval. The lender looks at your tri-merge credit report and takes the middle score usually to go off of. The lender loan report looks sometimes different than a standard credit report as it has specific home loan algorithms factored in.

Your broker/agent should not be making these blanket statements on whether you can or cannot get a loan. It's really hard to say without looking at your total situation and not just what the score is.