Federal Housing Administration Case Study

206 Words1 Pages
As of Oct. 4, 2015, the Federal Housing Administration requires a minimum FICO credit score of 500 for homebuyers to qualify for financing, reports Bankrate. Borrowers with a FICO score of 580 or less must now pay 10 percent down before qualifying for financing through the FHA. However, the FHA does not provide the actual financing. The agency provides insurance to lenders in the event borrowers default, explains the U.S. Department of Housing and Urban Development. Therefore, mortgage lenders underwrite loans based on the guidelines set forth by the FHA. If the loans do not meet the requirements of the FHA, the agency does not issue mortgage insurance on the loans. As of Aug. 1, 2015, the Consumer Financial Protection Bureau implemented