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Elizabeth Weintraub

Wells Fargo Lowers FICO Score Requirements for FHA Loans

By February 23, 2011

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As noted by the California Association of REALTORS last week, Wells Fargo announced a surprise policy reversal in January regarding FHA loans. While competitive institutional lenders are raising FICO limits to 620 or better, Wells Fargo is lowering those limits to as low as 500. For FICOs between 500 and 579, the down payment requirement is 10%, and the down payment cannot be a gift from a relative. Borrowers with FICO scores of 580 to 619 will need to put down a minimum of 5%.

For home buyers with FICOs above 620, the minimum down payment requirement remains at 3.5% and gift funds can be used. Seller concessions toward closing costs remain at a maximum of 3% of the purchase price.

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At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.


February 23, 2011 at 2:36 pm
(1) Cyndie says:

Is this just for California, can I get a Wells Fargo loan in NY? Most online mortgage FHA require a mortgage OVER a certain amount of money, the homes I am looking at are lower than 60,000.

February 23, 2011 at 2:44 pm
(2) Elizabeth Weintraub says:

FHA is a federal program and Wells Fargo is a national lender. I have no idea if WF has minimum loan requirements in New York, but one call to a New York mortgage broker should clear up that question.

March 1, 2011 at 5:13 am
(3) Pamela says:

Do you know if Wells Fargo requires education or counseling for first time buyers qualifying with lower credit scores?

March 1, 2011 at 10:26 am
(4) Andycloses says:

Hi, We (M&T Bank) do FHA loans in NYS all the time. We still allow a 6% sellers’ contribution (not just 3%) and since we are based in NYS. Also, we don’t charge a commitment fee on top of the bank origination charge like Wells does. We also only require 3.5% down payment for scores all the way down to 580.
I’m in my office right now.

BTW Elizabeth, I don’t find too many potential borrowers with scores under 580 who have 10% to put down anyway and typically there are judgment(s) and/or several collections against a borrower when they do have scores in the low to mid 500′s, but it is certainly a refreshing trend to see a huge bank lightening up on credit standards. The PMI companies are beginning to become a little more lax with their underwriting standards too.

December 21, 2011 at 8:29 pm
(5) Manoj says:

Hi Andycloses,

Please let me know how to get in touch with you/your bank regarding my mortgage. I will give you details if you can email at my email.

February 6, 2012 at 8:52 pm
(6) Nicole says:

I’ve been trying to get a FHA loan through wells fargo the last 3 months. they keep telling me my credit has to be 600, my 3 credit scores are 617, 598,598, i’ve paid off 95 percent of my debt, and i still can’t get a loan with them, and it seems my score hasn’t changed none when they check it. I got the money, just can’t seem to get the help. i was told once my 2 points go up i could get a 90,000 dollar loan as long as my taxes are under 3500 dollars. I’ve found lots of houses in the budget range that WF gave me, but it seems i always have to keep pushing it back and waiting. Is there something that can be done? i don’t know what else to pay off, i even opened up a secured credit card because they told me it would help. I live in NYS

February 6, 2012 at 8:55 pm
(7) Elizabeth Weintraub says:

You might check with a mortgage broker who works closely with a credit repair company. I’ve heard fascinating stories from borrowers who bumped up their FICO scores that way.

February 21, 2012 at 5:22 pm
(8) Jonathan says:

So After reading this article I get happy and call Wells Fargo. Come to Find out the Article is COMPLETELY WRONG. the 620 Credit Mark is set by the GOVERNMENT.. So this 500+ crap is just tht CRAP!!!!.. Dont believe me??? Call Wells Fargo and ask them..lollololololol

February 21, 2012 at 10:13 pm
(9) Elizabeth Weintraub says:

Acceptable FICO scores are set individually by banks and investor overlays.

February 27, 2012 at 3:34 pm
(10) Kathy says:

Yes, Jonathan you are right, this article is CRAP!

I called and spoke to an agent with Wells Fargo. They are not doing mortgages for FICO scores under 620. And, at 620 you will still need 5-10% down payment. The only way you can get the 3.5% FHA is if you are a first-time home buyer.

They will do mortgages for a VA Loan with a FICO score of 600.

There are folks who have had hardships, bankruptcy and such, that are working on their credit. It takes time. There is a minimum of a 2 year wait after bankruptcy discharge to get a mortgage and the FICO needs to be 620. There is a 3 year wait after bankruptcy discharge if you had a mortgage involved in the bankruptcy; plus the FICO score of 600.

It’s not easy rebuilding your credit. You need 3-4 good standing credit references for 12 months to get your credit score up. A credit card, auto loan, and small personal loan. It’s time consuming but worth it.

1. Orchard Bank will give you a credit card with a small limit to start.
2. Heights Finance will give you a small personal loan.
3. Fitzpatrick Furniture (EFS Furniture) will give you a household secured loan.
4. Many places will give you an auto loan (not buy here, pay here unless they report to credit bureau)

Don’t apply for credit if you know they are going to turn you down. Inquiries can take off 3-5 points each time.

Pay your bills on time. Try to stop collections before they happen. If they happen, pay them asap. No 30 day lates can be on your credit report.

Anyway, hope this helps.

February 27, 2012 at 4:16 pm
(11) Elizabeth Weintraub says:

This article is about Wells Fargo loans in California, so if you are not applying for a WF loan in California, this does not apply to you. You can get more information at the California Association of REALTORS website.

Also, FICO scores are NOT established by the government.

April 1, 2012 at 2:15 am
(12) Will says:

The Wells Fargo mortgage consultant that I worked with last year in southern NJ explained similar terms as listed in this article. FICO less than 580 would be subject to manual underwriting and need 10% down. FICO between 580 and 620 would be auto-underwritten (by a computer) and need 5% down and FICO over 620 would only need 3.5% down. So this article isn’t crap…..you just need to speak to the right people at Wells Fargo. Try using their mortgage consultant locations not regular branches or 1800 numbers. I find that the consultants are willing to work harder to get people what they need and explain all available loans that aren’t mentioned via the web or in blogs. Before I spoke to a consultant I spoke someone who was a mortgage service representative by dialing the 1800…….this person only told me that the minimum FICO needed was 620, didn’t explain any ways around it or and seemed eager to get off the phone. Elizabeth thanks for sharing this initial article by the way!

April 1, 2012 at 11:57 am
(13) Elizabeth Weintraub says:

Thank you, Will. I am glad it worked out for you. The thing is people believe hard-and-fast rules and never check to see if there is an alternative to that vanilla loan. Often, there is.

July 15, 2012 at 9:35 pm
(14) Jan says:

Are you serious in saying that PEOPLE believe hard and fast rules and never check to see if there is an alternative? Really? What are mortgage loan seekers suppose to do, call EVERY mortgage consultant in a tri-state area looking for a different answer? Well guess what, WE DO THAT and it’s discouraging when I call 6 different people and get 6 different answers. Shouldnt EMPLOYEES be trained to convey alternative information since they are GETTING PAID to give info? If they aren’t going to automatically give you alternative info, then THEY SHOULD AT THE VERY LEAST don’t say anything and just give you the number of THE PERSON WHO ACTUALLY HAVE THE COMPLETE INFO!

July 20, 2012 at 4:06 pm
(15) Kim says:

I am in process of getting a FHA loan. I have more than 10% down and funds to cover the closing costs. We had credit card debt that put our FICO score at 629. Our parents gifted us the funds to pay off the credit cards boosting our score to 661. Now loan officer is saying that gift money can only be accepted if FICO score is over 680. Is this correct?

Down payment was our money. Gift money was only used for paying off the credit card debt to boost our credit score.

July 21, 2012 at 9:23 am
(16) Elizabeth Weintraub says:

You might want to check with another mortgage broker and compare apples to apples. You might be using different terminology.

April 15, 2013 at 4:19 am
(17) Kenneth Duncan says:

Last week I was turned down because of my fico score. My lowest of the 3 ficos was 567. Wells fargo of Provo, Utah told me that their was nothing that he could do for me. That is okay, I will reapply at a Salt Lake city wells fargo.

April 29, 2013 at 9:48 am
(18) Kenneth Duncan says:

I applied for a loan with wells fargo in Utah and my lowest fico score is 567. I was turned down because my fico was to low.

July 7, 2013 at 12:24 am
(19) Marina says:

Hi All,
My husband has credit scores of 575 585 and 601. We have 10-20% down and he has 14 years of verifiable income from the same employer. His income is 43,375 and we are looking for a home in the $155,000 to 185,000 range. Will wells fargo finance him. He is also a first time home buyer and a teacher.

July 9, 2013 at 1:48 pm
(20) Elizabeth Weintraub says:

This blog was written over 2 years ago. Lender’s requirements change all of the time. Your middle FICO is 585, and while it’s not impossible to get a loan, the rate will be undoubtedly be higher than a rate offered to a borrower with a FICO above 640.

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