Wells Fargo Says Credit Scores
of 500 OKAY!
In a long-awaited shift, Wells Fargo is providing FHA mortgages to borrows with scores as low as 500! The move come after the National Association of Realtors and FHA Commissioner David Stevens, among other late last year, criticized the country's major banks for requiring credit scores as high as 650 in cases before making loans. At NAR's annual conference last year in New Orleans, Stevens said banks' credit policies were out of sync with the FHA and artificially restraining home sales by as much 20 percent. Under its new policy Wells Fargo will accept borrows with credit scores of 500-579 if those borrowers can make a down payment of at least 10 percent; gifted funds or other down payment assistance is not allowed. For borrowers with credit scores of 580-599, borrowers must put down 5 percent, with the same restriction on gifted and assistance funds. Borrowers with credit scores of 600 or higher can make a 3.5 percent down payment. The new policy took place Jan 15. As reported in Realtor Magazine, March 2011. (Page 9) "Five to Watch"