Colorado Mortgage Team

Colorado FHA Streamline Refinance Now Requires Minimum 620 Credit Score

For some time, there has not been a minimum credit score requirement for Colorado FHA streamline refinance loans. Yesterday, it was announced by the last major lender that now they are requiring a minimum of a 620 credit score on all Colorado FHA streamline refinance loans. TB&W made the announcement that they were moving their minimum credit score requirement for all Colorado FHA streamline mortgage refinance loans to 620.

Details Of The Announcement of New Credit Score Requirements For FHA Streamline Refinance Loans

FHA Streamlines (credit and non-credit qualifying) and VA IRRRL’s with Credit Scores below 620 must be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered to TBW within 10 days after closing Loans in this category locked on and after July 13, 2009 will require a minimum FICO of 620.

Clients will be required to obtain a 3 Repository credit report and utilize the standard method of determining qualifying FICO. Any Conventional, FHA (including Streamline Refinance), or VA (including IRRRL) loan that exceeds $417,000 with a Credit Scores below 660 must be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered to TBW within 10 days after closing Loans in this category locked on and after July 13, 2009 will require a minimum FICO of 660.

Clients will be required to obtain a 3 Repository credit report and utilize the standard method of determining qualifying FICO. In addition, any previously announced minimum Credit Score requirements that TB&W has put into place, that did not have a specified Closing date, will be required to be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered within 10 days after closing.

Therefore, any loan, regardless of whether it may be locked, registered or approved, that has a qualifying credit score below 620 (with the exception of those loans that have specified higher FICO requirements) must CLOSE (Note Date) no later than September 15, 2009. TB&W will continue to allow non-traditional credit for those borrowers with no useable credit for the loan programs that allow the use of such credit in accordance with published guidelines. TB&W is fully aware that these limitations may result in the inability for a particular loan to meet these specified deadlines. TB&W will work as diligently as possible to accommodate all loans in the pipeline. We will be unable to grant any extensions or exceptions to these requirements.

Colorado FHA Streamline Refinance: What Happens Now?

Although FHA guidelines don’t require a minimum credit score, pretty much all lenders now require that you have at least a 620 score for the Colorado FHA streamline refinance loan program. It is possible that there are still smaller lenders who can offer the Colorado FHA refinance streamline loan with no minimum credit score requirement, but you will have to search harder to find them.

While interest rates are low, many people with Colorado FHA loans are taking advantage of the FHA streamline refinance program. The FHA streamline program is very popular because there is no income verification, no asset verification, no credit score required.

Are you sure there is no credit score required for an FHA streamline refinance?

Yes.

And yes, we are aware that many people have recently been told by their loan officer that there is a minium credit score required for all FHA streamline refinances. Many people have also been told that it is an FHA requirement that you now must have a certain minimum credit score if you want to participate in the FHA streamline.

That is just plain wrong.

What has happened though is that many lenders have started requiring that borrowers have at least a 620 credit score for the FHA streamline refinance — but it is not an FHA requirement. Since it is a lender requirement and not an FHA requirement, many lenders are requiring that you have at least a 620 credit score — but many are not.

There are still lenders who will be happy to help you with your FHA streamline refinance — even if you have below a 620 credit score. So if your loan officer has recently told you that you needed a 620 credit score to qualify, be sure to ask a different loan officer while rates are still at historic lows!