For the first time in a long time, credit standards have actually loosened in regards to getting a home loan. Borrowers getting FHA home loans can once again get a mortgage with credit scores as low as 580.
With no fanfare or public announcements, two of the largest FHA-approved lenders have backed off their controversial “overlay” requirements on FICO scores lender overlays are qualification requirements that can be more stringent than FHA’s own requirements.
Both Wells Fargo and Quicken Loans confirmed to me last week that they will now lend to applicants with 580 FICOs and 3.5 percent down payments.
Their revised standards conform in most respects to FHA’s own minimums, and open the agency’s financing to large numbers of buyers whose credit scores have sagged during the recession. Wells Fargo is the largest originator of FHA-insured mortgages; Quicken ranks third, according to industry data. via FICOs and FHA: 2 big lenders loosen up | Inman News.