How does a FHA loan work with two people. Ones credit score is excellent, one is poor. Is there anyway to use one persons credit score but two different incomes.
No. If the income of the second person is needed to qualify, the credit score and history of that party comes in also.
Some lenders will allow both to be on title, but the ONLY the income/credit of the individual(s) that will be signing the Note can be used. This will applied to both conventional and FHA loans. FYI: FHA guideline requires a minimum credit score of 620 BUT they will go lower IF they put 10% down (instead of 3.5%).
I just fond it ... minimum FHA score is 580 BUT big but 10% down.
@Alex Schmidt Are you able to do it on your own? Is the other person your spouse/partner?
@Alex Schmidt Welcome to BP ! Have you find your answer for your question? If you still need help on FHA loan, I have a lender can that refer to you to answer any question that you have. He also have First time home buyer program such as, CHF (0.5% down payment) and Mortgage Credit Certificate (tax credit back to you yearly).
Let's me know if you have any more question.
FHA does not have a credit score requirement in actuality. You'll find that if you go to the big banks they will need a min of 620-640 fico scores, smaller to mid sized mortgage bankers will have scores all the way down to 500.
Banks create the min amount of fico that they would like to take in terms of risk.
To answer your question the middle score of the lowest borrower will be used to determine qualification. So if you have a credit score that meets the min of the bank writing the FHA loan then we'll use your income since your score meets the min. If your coborrower or cosignor has a score that does not meet the min then their income cannot be used and only your income will be used in your qualification.
I work day to day as a mortgage planner so I am familiar with FHA.
Thanks everybody. That was a ton of information really quickly!
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