Lower FHA MIP… even with Low Credit Scores… 500 Minimum Credit Score
On Feb 22, 2023, FHA released mortgagee letter 2023-05 announcing a reduction in the annual mortgage insurance premium (MIP) rates by 30 basis points. The new MIP rates are applicable for all forward FHA mortgages* even with low credit scores and down to a 500 minimum score.
- Credit Score – A credit score of at least 500 is required. No Overlay Lender since 2001
- Down Payment – 3.5% down payment required with a 580+ credit score.
- Down Payment – 10% down payment required with credit scores between 500-579.
- Eligible down payment sources – checking/savings, gift from family member, 401k, IRA and eligible down payment assistance programs.
- Property Requirements – All properties must meet certain safety, security, and soundness (structural integrity) requirements.
*Note: The new reduced rate is not applicable for streamline refinance loan and simple refinance loans used to refinance a previous FHA mortgage endorsed on or before May 31, 2009 and Hawaiian Home Lands (Section 247)
