6/6/23 – Minimum Credit Requirements

I have seen some poor credit come across my desk lately, and please understand that it doesn’t have to be the end of a deal. Every loan product has guidelines, and even when a person doesn’t meet them, we will work with the buyer to ensure we can get them approved at some point in the future.

Fannie and Freddie have a minimum credit score of 620.

• If you have a Bankruptcy Chapter 13, you must wait two years to get a loan from these agencies. If you had a Chapter 7 Bankruptcy, you must wait four years.
• A foreclosure has a 7-year waiting period with some exceptions for extenuating circumstances after three years!
• Short sale / Deed in Lieu of Foreclosure – you must wait four years after this event to get financing from either of these agencies.

Little known fact: If you go Bankrupt and your Mortgage is in your Bankruptcy, you get foreclosed on four years later. You can buy a house immediately because the Bankruptcy came before the Foreclosure!

FHA – Minimum Fico Score 500 (good luck getting that done!) 550-579 is a challenging area to get a loan approved, and it gets easier at 580, and interest rates get better at a 600 score.

• If you have a Bankruptcy Chapter 13, you can get FHA financing while you are still in your Bankruptcy as long as you have made 12 payments on the Bankruptcy! If you had a Chapter 7 Bankruptcy, you must wait two years after the discharge date before you can finance.
• A foreclosure has a 3-year waiting period with some exceptions for extenuating circumstances after one year!
• Short sale / Deed in Lieu of Foreclosure – you must wait three years after this event to get financing from FHA.

There are exceptions for extenuating circumstances, but those must be the death of a spouse or serious illness, which must be documented!

VA – Minimum Fico Score 550, but a 600 score has a MUCH better interest rate.

• If you have a Bankruptcy Chapter 13 then you can get VA financing while you are still in your Bankruptcy as long as you have made 12 payments on the Bankruptcy! If you had a Chapter 7 Bankruptcy, you must wait two years after the discharge date before you can finance.
• A foreclosure has a 2-year waiting period with some exceptions for extenuating circumstances after one year!
• Short sale / Deed in Lieu of Foreclosure – you must wait two years after this event, but extenuating circumstances can allow you to do it sooner!

Rates have been flat the past couple of days, and we were better at the beginning of last week and worse at the end. Can someone please make these rates go down?

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• Government Loans (FHA / VA) are in the high 5’s.
• Conventional Loans up to $726,200.00 are in the 6’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the 6’s
• Jumbo loans above $1,089,300 are in the 6’s
• 5/1, 7/1, 10/1 Arms are in the high 6’s.
• Bank statement loans - They are available with 10% down again! 7’s + depending on down and credit score.
• No income qualifier – 20% down with reserves! In the 8’s and 9’s!
• 0 down loans are in the mid to high 6’s – 660 credit score min right now, up to $740,000.00.
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - are typically 7.99% with limited fees – But they get you where you need to go!
• 0 down California Dream for all Equity Share – Postponed until 2024!
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I am around all week if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!