It’s been a busy week for HUD as far as mortgagee letters go. HUD released the updated LTV/credit score requirements, which they announced earlier this year. Loan to value (LTV) ratios will now be limited depending on the borrower's credit score as follows:
• Borrowers with a minimum score of 580 or above are eligible for maximum financing;
• Borrowers with a minimum score of 500 to 579 will be limited to a 90 percent LTV; and
• Borrowers with a minimum score under 500 are not eligible for FHA financing.
Borrowers without credit scores may still qualify for financing under the non-traditional credit underwriting requirements. These requirements are effective for all case numbers ordered on or after October 4, 2010.
HUD has delayed any changes in the maximum amount of seller concessions or any changes in manual underwriting requirements.
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