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BAD CREDIT FLORIDA FHA MORTGAGE GUIDELINES

Please note Bad Credit Florida FHA loan guidelines are a moving target and are subject to change without notice.

Bad Credit FHA mortgage with credit scores between 530 and 579

· 12 month rental history

· 3 trade lines with 12 month rating

· NO non occupying borrowers

· NO gifts allowed

· Borrower must have their own money for down payment and closings cost

· Borrower must have 3 months reserves

· No payment shock

· Max ratios 31//43

· All collections less than 2 years old must be paid

· Spouses that are not on the loan we must include her dept in the borrowers ratios

· All judgments must be satisfied

 Bad Credit FHA Mortgage with Credit scores between 580 and 599

· 12 month rental history

· 3 trade lines with 12 month rating

· NO non occupying borrowers

· NO gifts allowed

· Borrower must have their own money for down payment and closings cost

· Borrower must have 2 months reserves

· No payment shock

· Max ratios 31//43

· All collections less than 2 years old must be paid

· Spouses that are not on the loan we must include her dept in the borrowers ratios

· All judgments must be satisfied

Bad Credit FHA Mortgage with scores between 600 and 619

· 12 month rental history

· 2 trade lines with 12 month rating (1 has to be on the report the other can be rent.

· NO non occupying borrowers

· NO gifts allowed

· Borrower must have their own money for down payment and closings cost

· NO reserves needed

· Max ratios 40/45

· All collections less than 2 years old must be paid

· All judgments must be satisfied

Bad Credit FHA Mortgage with scores between 620 and 639

· No rental history (unless DU requires)

· 2 trade lines with 12 month rating ( 1 can be rental)

· NO non occupying borrowers

· Gifts are ok

· Max ratios 42/55 with DU approval

· Collections ok with DU approval

· All judgments must be satisfied

 Get a Good Credit Florida FHA Mortgage Credit scores over 640

 · No rent verification

· No trade line requirements

· Non occupying borrowers OK

· Gifts allowed

· Max ratios 43/56.99 with DU approval

· Collections do not have to be paid

· All judgments must be satisfied

 BAD Credit Florida Mortgage – Definitions for Bad Credit Florida mortgage terminology.

VOR= verification of rent if the Florida mortgage applicant rents from a private individual Florida mortgage lenders require 12 months canceled checks or bank statements showing the exact amount of money coming out each month for money orders or automated rent payments or a property management company can verify in writing if the Florida home is managed by a property manager or it’s an apartment complex.

  • Occupying co borrower= A co borrower that is not going to live in the house (example a daughter with no income buys a home and dad cosigns and we use his money for qualifying for the new payment and of course dad has his own home.)
  • Reserves= cash in the bank after closing usually when a Bad Credit Florida Mortgage lender wants reserves it’s just for Florida mortgage payments. Example the mortgage payment including principal, interest, taxes and insurance is 1000.00 a month and the Florida mortgage lender wants 3 months reserves after all money is paid at closing $3000.00 is left in the bank.
  • Debt to Income Ratios=  30/45 he first number is the new housing payment and the second is the new housing plus all other installment debt and revolving debt monthly payments reflected on your credit report.
  • DU= an automated underwriting software that FHA, VA and Conventional Florida Bad credit mortgage lenders use to approve loans.
  • Trade Lines= a trade line for example would be credit card, student loan,  car payment reporting to the credit bureau for at least 12 months.  Most bad credit Florida mortgage lender want 3 trade lines on time for the last 12 months in order to count as a good trade line.
  • Alternative Trade Lines= example phone, cable water, electric, car insurance bill or rent (12 month history)

 

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