No Fico Score, No Problem! The FHA loan will fit!
- 580+: Borrowers with a minimum decision credit score at or above 580 are eligible for maximum financing – 96.5% LTV or 99.5% of the sales price with CHF Access. (CHF ACCESS is 99.5% with 2nd of 3% and .5% down payment)
- 500 – 579: Borrowers with a minimum credit score between 500 and 579 are limited to 90% LTV. 10% down payment. *< 500: Borrowers with a minimum credit score of less than 500 are not eligible for FHA-insured mortgage financing.
ALTERNATIVE CREDIT REFERENCES:
GROUP 1 – Preferred References (Non-Traditional Credit borrower)
- Rental Housing Payment
- VOR from Professional Management Company
- 12 mos. cancelled checks if using Landlord or renting from family member
- LOE plus Budget Letter if living with relatives and no rental verification
- Utilities – Includes Gas, Electricity, Water, Cable TV, Land line home phone
GROUP 2 – Non-Preferred References:
(Insufficient Credit borrower or use as additional items for Non-Traditional Credit Borrowers)
- Insurance Coverage – Includes Auto, Life, Medical, Renters
- Cell Phone
- Internet Services
- Child Care Payments
- School Tuition
- Retail Stores – Includes Furniture, Rent-to-Own, Appliances, Specialty, Department Stores
- Personal Loans
- Storage Units
- Auto leases
- 12 months savings by regular deposits with NO NSF’s
NON-TRADITIONAL CREDIT BORROWERS:
Non Traditional Credit – Borrowers w/ No Fico Scores or Limited Trade-lines
- Provide at least three (3) credit references rated at least 12 months. At least 1 reference must be from Group 1 (G1 references should be exhausted before using G2 as G1 is more indicative of a borrower’s future housing payment performance.)
- Borrower’s with NO G1 references will be looked at as Insufficient Credit borrowers:
- Prefer using verification through Credit Bureaus using Nontraditional Mortgage Credit Report (NTMCR). If NTMCR is impractical or unavailable, obtain independent verification of trade references. Use public records from state, county or city records. Use published address or telephone number for that provider/creditor – don’t rely solely on information provided by the applicants
- Provide landlord information such as Name, Phone number to verify rental history.
- All references from individuals should be backed up with most recent 12 months cancelled checks.
- Rental references from management companies may be used in lieu of 12 months cancelled checks.
- Various service providers now available who develop bill payment history as well as scoring – FHA allows it for borrowers with no or little traditional credit.
*No history of delinquency on rental housing payments and other credits in last 12 months
*No new collection accounts / court records reporting (other than medical) filed within the past 12 months