FHA raising FICO floor, reducing seller concessions

Changes meant to address losses in insurance fund

The premier event for luxury agents and brokers
Luxury Connect | Oct. 16-18 | Beverly Hills

FHA borrowers will soon need a 580 FICO score in order purchase a home with the minimum 3.5 percent downpayment, and won’t qualify for the program at all if they have a score below 500.

Federal housing officials are moving closer to implementing several policy changes announced in January that will also reduce the maximum allowable seller concession on FHA-backed loans from 6 percent to 3 percent and tighten underwriting standards for manually underwritten loans.