The latest buzz in the mortgage industry is about FHA loans. Traditionally, one of the advantages of FHA offerings was that there was no minimum credit score needed to get a loan. But now it’s rumored that there are new minimum credit scoring requirements. Is this true? Yes…..and no. Yes, because FHA guidelines do require a minimum FICO score of 580 for approval. And no, because there are exceptions to this rule. If your current loan is an FHA or VA and you are refinancing with no cash out (also referred to as streamlining) the credit score requirement doesn’t come into play. If you have no credit score and have to use non-traditional credit (such as statements from your landlord and utility companies) then you can still get approved for your loan. And finally, if you work with a lender that uses an FHA Automated Underwriting System (AUS) then you can get a mortgage with a score <580 if the automated system approves you. The AUS considers a host of factors in addition to your credit score and if these are strong enough to overcome a low score you may still get your mortgage.

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