REVISED - FHA FICO Requirement

The following can happen to you while your loan is in process.
People wonder why an application that started well ended in
a disappointment.

Introduction
With the recent increase in market volatility, XYZ LENDER continues
to adjust lending policies to better protect the interests of
our customers.
This communication adjusts and clarifies previously stated changes
in FHA FICO requirements.

Effective Date
Updated FICO requirements are applicable for any FHA loan underwritten
on or after April 17, 2008, regardless of when the loan was registered or locked.

Credit Score Requirement
Wholesale will no longer accept loan applications on the following FHA
transactions with a FICO score less than 580,
even if loan has been approved by HUD Total Scorecard:
• Purchases
• Cash-Out Refinances
• No Cash-Out Refinances (fully documented)

NOTE: FHA Streamline refinances and loans with non-traditional credit
are exempt from the above policy and may continue to be underwritten
(including manually underwritten) according to published FHA guidelines.
Pipeline Policy

Loans received by our Underwriting department on or after April 17, 2008, are subject to the new guidelines. Loans that were received prior
to this date will be addressed as follows:
• Loans that are subject to previous policies must close by the
current credit expiration date;
• The updating of an expired credit approval will cause the loan to be
subject to the new guidelines.

This is not an isolated incident, it happens more frequently than the
public knows and its impact can be devastating to borrowers.