As of Oct. 4, 2015, the Federal Housing Administration requires a minimum FICO credit score of 500 for homebuyers to qualify for financing, reports Bankrate. Borrowers with FICO scores of 580 or less must now pay 10 percent down before qualifying for financing through the FHA.
The FHA does not provide the actual financing; instead, the agency provides insurance to lenders in the event borrowers default, explains the U.S. Department of Housing and Urban Development. Therefore, mortgage lenders underwrite loans based on the guidelines set forth by the FHA. If the loans do not meet the requirements of the FHA, the agency does not issue mortgage insurance on the loans.
As of Aug. 1, 2015, the Consumer Financial Protection Bureau implemented the “know before you owe” mortgage forms, cites Secondary Marketing Executive. The new mortgage forms streamline the current Real Estate Settlement Protection Act and Truth in Lending Act forms. The CFPB implemented the new forms to prevent borrowers form experiencing “information overload” during the mortgage closing process. The CFPB wants to help borrowers understand their options before they sign the disclosures, and it claims that the new forms ensure borrowers receive the best deal possible while avoiding predatory lending practices.