FHA Loan with 500 Score 1-4 Units

Extended Guidelines

This loan requires a 10% Down Payment in exchange for extended credit guidelines.  Buyer must be able to afford the mortgage and be responsible with rent. Credit issues should source from past issues and recent improvement of credit repayment pattern.


Credit score: 500 minimum
Property type: 1-4 units, Condo, PUD
Occupancy: Primary residence
Down Payment: 10% minimum
Loan to Value: 90%    CLTV:   90%
Gift Funds Allowed. No minimum buyer contribution required.
Closing cost: Seller and/or lender can pay up to 6%
Debt Ratio: 41%     with compensating factors 46/50%


Additional Notes:

  • Must complete Homebuyer Education
  • Must provide evidence of strengths to offset their deficiencies
  • No negative credit reporting within last 12 months
  • Should pay collections within  24 mos. or over $5,000
  • VOR from property management or 12 mos. cancelled checks
  • Condos must be FHA approved
  • Non-occupying borrowers permitted on SFR
  • Unpermitted additions will not be given value
  • Bankruptcy 2yrs, Foreclosure 3yrs, Short Sale 3 yrs
  • First time buyer not required. Must be primary residence.

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