Loans By Kathy: 640 Credit Score for FHA, Maybe, Maybe Not

640 Credit Score for FHA, Maybe, Maybe Not


For the longest time, the investors seemed to keep moving up the minimum credit score for an FHA mortgage.  We started at a 580, then 600, then 620 and most lenders now have a minimum requirement of 640.  For the quite some time, it looked like we were headed to a minimum middle credit score of 660.  But that seems to be on the back burner now.  It should be noted, that a borrower with at least a 661 middle credit score will receive the best interest rate as they are not subject to the risk-based pricing.




There are however, some investors that have relaxed some of the credit score requirements and will now accept a lower credit score.  Now, I am not going to imply that these are going to be "easy" to get approved, and most likely the borrower will have to have more than one compensating factors in order to get approved.  But for a borrower that has good work and rental history and has been able to save part if not all of their down payment, this is a terrific option.  A consumer with a lower score can take advantage of still relatively low interest rates, lower purchase prices in most areas and with a good payment history moving forward can rebuild their financial life.

When possible, I recommend to my customers that they do everything possible to get their score as high as possible before they make the purchase, but sometimes, the amount of time it will take works against their time line.

For more information on FHA requirements please contact me or check out


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Kathy Sheehan Senior Loan Officer






Bay Equity LLC

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11475 Great Oaks Way, Suite 350, Alpharetta, GA 30002

800.BAY.3703 Bay Equity LLC NMLS ID#76988



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The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.


Comment balloon 4 commentsKathy Sheehan • July 20 2011 06:06PM


I've received word of some credit score requirment reductions from one of the banks here in Oklahoma about a week ago.. 

Posted by 1 ~Judi & Don Barrett & Chassy Eastep - Integrity, BS Ed, Integrity Real Estate Services -IDABEL OK (Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745) about 7 years ago

There are a few wholesale lenders that have reduced the credit score requirement.  In fact, I closed one last week.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) about 7 years ago

Kathy, I keep encouraging my buyer clients to continue to work on their credit. They just don't all understand how incredibly important it can be.

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) about 7 years ago

Connie, I agree, but sometimes with the right compensating factors a buyer may not have to wait until they get the score higher.  Besides a 12 month clear mortgage payment history on a credit report will do more to boost their score.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) about 7 years ago