Dallas Real Estate Tip: FHA Loans FAQ

With FHA loans becoming more popular in the Dallas real estate market due to the increased loan amounts, declining market issues, and changing MI guidelines, I have put together some FHA FAQs to cover some questions we’ve received concerning FHA loans.

Is there a limit on the percentage of discount points that can be charged?
Per HUD requirements, discount points, origination fees, and other such fees cannot exceed two percent. Keep in mind, only one percent in origination can be charged. If the two percent limit is exceeded, the variation must be based upon actual fees or costs charged to the lender to make the loan.

Is there a minimum Credit Score requirement?
FHA does not have a minimum credit score, however most lenders in the market today do. For standard FHA loans, we currently only have one investor that will purchase loans with credit scores below 580 and those loans must receive an AUS approval. We also have some options for borrowers with no credit scores at all utilizing Non-traditional Credit. FHA Jumbo loans require a minimum credit score of 580.
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