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Credit
Guidelines
A borrower must demonstrate an good to
excellent repayment history of all debts. In addition, the borrower must have a minimum
credit score of 620 to qualify for all conforming loans. FHA and VA do not have
credit score requirements. Also, any outstanding collection accounts, charge-offs,
judgments, and liens must be paid by closing and have an acceptable reason for the
delinquencies (hardships, medical reasons, etc.). Repossessions, foreclosures and
bankruptcies must have a minimum of two (preferably three) years since the discharge of
the debt and the borrower must have re-established excellent credit for a minimum of 12
months (preferably 24 months). If extenuating circumstances do not exist for the
foreclosure or bankruptcy, the borrower(s) must have a minimum credit score of 660
(conforming only). If a person is currently in a Chapter
13 bankruptcy, they may still qualify for a FHA loan provided the court approves the
transaction and the borrower can demonstrate a timely payment history for at least 12
months.
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