FHA Minimum Credit Score
I talked about it a few weeks ago and it is happening. We have seen a slew of lenders put a minimum 580 credit score on FHA Loans because they were getting flooded with Subprime crap. Unfortunately this is effecting normal FHA Business and is going to make it more difficult for borrowers who need FHA loans to get them.
Additionally I know the underwriting times have gone crazy too. We are hearing 20 - 30 days for FHA underwriting at the big lenders and the wholesale lenders where brokers have to send their files. This is one of those time I love being a small independent lender because I am still able to give 24 HOUR FHA UNDERWRITING to my loan officers and it is giving them a huge competitive advantage in the market.
We can close a loan faster than they can underwrite it… pretty impressive to Real Estate Agents in the current market. I am still not sure on the under 580. We are continuing to offer them on a limited basis, but we are having Senior Management review all of the loans below a 580. My biggest fear is that there will be no services left who want the under 580 loans. At that point we will have to look into servicing our own loans or putting a minimum score in place.
We’ll see….