What kind of credit is needed to get an FHA loan?

I get asked more questions about credit than I do about interest rates. Many times its from someone with a credit issue or perceived credit issue and they're looking for reassurance about their credit.

The FHA Mortgage program doesn't have a minimum credit score, instead it looks at the credit history as a whole. The biggest one is that a borrower must have a clean credit history for the last 12 months. That means anyone with a 30 day late payment on their credit report is ineligible. Also, FHA Mortgages have a 2 year waiting period after a bankruptcy discharge.

Now the lack of a minimum credit score doesn't stop the individual banks and lenders from having their own requirements on top of FHA Mortgageguidelines. Right now, most lenders and banks are requiring a 620 minimum fico score. They are also requiring that the borrower have a minimum established number of credit lines, usually 3 to 5. This can be a problem for the first time home buyer or someone who doesn't use a lot of credit.

In my next post, I'll go into detail about how one can overcome a skinny credit profile and get approved for one of my Idaho FHA Mortgages.