Many people have been told that in order to qualify for the FHA streamline program, they need to now have a minimum credit score. This is kind of true… but kind of not. The truth is that FHA doesn’t require a credit score to insure the loan — but many lenders have made the decision to require that a borrower have a mid credit score of 620 or higher.
What this means to you if you are currently shopping for an FHA streamline refinance is that you need to ask the question “are you requiring a credit score for the FHA streamline program?” and expect many lenders to say “yes”.
But some will say “no” — or at least as of today they will.
But this could change… at any time… and has recently. Lenders started requiring that borrowers had a minimum of a 580 credit score about a year ago, but recently, may of them have moved to 620. I haven't head of any talk of it moving higher, but I can say that I wouldn't expect it to go lower anytime soon.
Why is the FHA streamline so popular? Well, for starters, you don't have to fully qualify for a new loan. You also get to skip one months payment when you go through the streamline program which will free up cash at a time when many people need cash. You probably won't need an appraisal. And - perhaps the most important, FHA won't let you participate in the program unless it actually lowers your interest rate and puts you in an overall better financial situation.
So -- if you are in the market for a FHA streamline loan or if you are wondering if you can take advantage of lower interest rates, be sure to act quickly and find a lender who is not requiring a credit score. True, it is harder than it used to be to find a lender who can do a FHA streamline with no minimum credit score, but it can still be done. Call to speak with an FHA streamline expert who knows if the FHA streamline is still possible to do without requiring a minimum credit score or if using a credit repair service may be your best option.