A borrower with a 580 credit score applies for an FHA loan with 3% down payment. What would be the underwriter's likely response?
Correct Answer
B) Require a higher down payment
FHA requires a minimum 3.5% down payment for borrowers with credit scores of 580 or higher. For credit scores between 500-579, FHA requires a 10% down payment. With a 580 credit score and only 3% down, the borrower would need to increase their down payment to 3.5% to meet FHA guidelines.
Why This Is the Correct Answer
FHA requires a minimum 3.5% down payment for borrowers with credit scores of 580 or higher. For credit scores between 500-579, FHA requires a 10% down payment. With a 580 credit score and only 3% down, the borrower would need to increase their down payment to 3.5% to meet FHA guidelines.
More Mortgage Knowledge Questions
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