To qualify for Federal Housing Administration down payment assistance, a borrower must pass the Federal Housing Administration lender and down payment assistance program's reviews, and must have a minimum credit score of 580 and 500 for 3.5 and 10 percent down payments, according to SF Gate. Lenders may need more requirements.Continue Reading
The primary Federal Housing Administration loan involves 96.5 percent of the value of purchase, as explained by SF Gate. The down payment assistance on the other hand is only subordinate to the primary loan, meaning it should only be settled after the Federal Housing Loan has been paid in full amount. As a result, the lender of the down payment assistance must have an assurance that the borrower has the ability to clear the debt owed to the Federal Housing Administration.
In addition to the minimum credit requirement set by the Federal Housing Administration, the loan lenders may set their minimum requirements as well, says SF Gate. These are referred to as overlay requirements and may be more difficult to meet than those of the Federal Housing Administration. In most cases, overlays require borrowers to meet a minimum credit score of 640. This overlay remains unaffected by the down payment amount of the borrower.Learn more about Social Services