This new program helps buyers with low credit scores get homes.
We often get questions from concerned buyers who are afraid their less-than-stellar financial status may affect their dreams of homeownership. Fortunately, there are ways these buyers can make it work thanks to a new FHA loan program. I met with Donna Jo Bennett of Guild Mortgage to find out more about this exciting news.
When the pandemic began, loan guidelines tightened up quite a bit. The required FICO score increased for both conventional and FHA loans, meaning fewer people could qualify. Guild Mortgage kept their requirement at 600, but with their new program, people can get an FHA loan with scores as low as 540.
“With their new program, people can get an FHA loan with scores as low as 540. ”
With this program, however, the down payment increases to 10% for people with a FICO score of 580 or lower. With borrowers who have a 580 FICO score or higher, traditional FHA loans only require a 3.5% down payment. Even though the requirement increased to 10%, people who are having difficulties rebuilding their credit can finally catch a break. If it’s not possible to save that amount, there are ways to bridge the 40-point gap and hit a 580 score.
This is fantastic news for anyone with low credit and some money saved up. If you’d like to talk to Donna and figure out what you could qualify for with this new program, visit her website at www.DonnaJoLoans.com. If you have any other questions or would like more information about buying a home, feel free to reach out to me. I look forward to hearing from you soon.
