Changes - They Are A-Comin'

We are hearing different things from the street regarding government FICO score changes.
There are changes looming on price adjustments for FHA and VA loans, we just don’t know
when they will take effect.

>620 Minimum FICO score for FHA and VA purchase and rate/term refinances.

>620 Minimum FICO for FHA streamline loans.

We do know for certain that as of March 9, 2009, all VA Interest Rate Reduction Refinance Loan
(IRRRL) transactions, must have a minimum FICO score of 620.

So, everything we hear has 620 being the magic score for every type of loan out there currently. In this age of "responsible" lending, lenders and their associated investors want to shore up their portfolios with "good" loans only. We see M.I. companies pushing towards 740 has a prime score for conventional conforming loans with heavy fees if the score is lower than that. The above 620 score seems to be where the government loans are going to settle.

As you begin to talk with potential home buyers (renters especially), it is increasingly obvious to me that as soon as someone makes the decision to head towards home buying, they need to have an experienced loan officer begin to evaluate their credit report and scoring and allow sufficient time for corrections to be made to get the highest score possible prior to actually pulling the trigger for loan preapproval. Your buyers will thank you for it!