If you have a credit score below a 580 it might be extremely hard to get a FHA loan in this current lending market. But there are other options when it comes to getting government loan. Even though FHA will insure loans below a 580 credit score the secondary market that buys and sells mortgage paper has set the stage as to what will be bought and sold in this market.When loans are bought and sold in the secondary market, investors watch a particular borrower’s performance. If they notice a particular borrower is not performing well on the secondary market they pull the plug on financing that type of risky borrower. So it’s essentially like watching your own stock portfolios performance. If that particular portfolio of yours is not dong well you stop investing your money in that stock. Mortgage loans work the same way.Over the last 6 to 7 years FHA loans were being written for all types of borrowers including borrowers below a 580 credit score. Until now there was never a credit score requirement for FHA loans. Most banks are requiring a middle credit score of 580. There are exceptions to this rule. Some banks will allow […]

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