For the past couple of years, when we talked to a borrower with a credit score of 580 to 600 – we told them they had a 3 to 4 month waiting period before they could buy a house. In MOST cases, that was all the time we needed to help someone who was motivated, and who could really afford a home, to get their scores in order.
Minimum credit scores for the NC Housing First Time Homebuyer program was 600, and we could help people get into houses if they qualified for the program and had the scores.
On May 1, 2013 that changed. It changed from a couple of perspectives… first the NC Housing program changed SIGNIFICANTLY. The changes include higher credit scores, more flexibility for homeownership status, and a better downpayment / closing costs assistance program.
Additionally, changes were made in April to the Automated Underwriting Systems for Fannie and Freddie – with those updates, Credit Score requirements for Governement loans went up to 640. Can Underwriters override the “Automated” Approval systems? Yes. But Will They??? That takes a VERY well documented case. [Read more...]