FHA May Raise Minimum Credit Scores

OK, I get it, FHA wants to do less business going forward. They have raised the monthly mortgage insurance, so that it is painful and will look to raise it even higher. They have raised the mortgage insurance premium . At one point the premium was higher, but the monthly MI was much lower, so it still made sense, now not so much.

They have already put on the table that they want to eliminate any possibility of canceling the monthly mortgage insurance, no matter what the equity is. If this happened, I will ONLY do FHA loan for folks that can’t qualify for anything else.

Now they are also talking about raising the minimum credit scores. There is NO evidence that there is a higher default rate with borrowers that have lower credit scores.

So, if FHA wants out of the mortgage industry, they are now well on their way to making that happen.

HUD Chief: FHA FICO Minimum May Rise

By: Brian Collins