Major Lender Makes Announcement of Minimum 620 Credit Score

The Indiana FHA streamline loan program doesn’t officially require that you have a minimum credit score, but as of yesterday if you want to participate in the FHA streamline loan program, there is not a lender who won’t require you to have a minimum of a 620 credit score. The announcement from TB&W regarding their minimum of 620 credit score requirement means all major US lenders now require at least a 620 credit score for anyone wanting to do an FHA streamline mortgage refinance.

Announcement Details

FHA Streamlines (credit and non-credit qualifying) and VA IRRRL’s with Credit Scores below 620 must be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered to TBW within 10 days after closing Loans in this category locked on and after July 13, 2009 will require a minimum FICO of 620. Clients will be required to obtain a 3 Repository credit report and utilize the standard method of determining qualifying FICO.

Any Conventional, FHA (including Streamline Refinance), or VA (including IRRRL) loan that exceeds $417,000 with a Credit Scores below 660 must be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered to TBW within 10 days after closing Loans in this category locked on and after July 13, 2009 will require a minimum FICO of 660.

Clients will be required to obtain a 3 Repository credit report and utilize the standard method of determining qualifying FICO. In addition, any previously announced minimum Credit Score requirements that TB&W has put into place, that did not have a specified Closing date, will be required to be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered within 10 days after closing. Therefore, any loan, regardless of whether it may be locked, registered or approved, that has a qualifying credit score below 620 (with the exception of those loans that have specified higher FICO requirements) must CLOSE (Note Date) no later than September 15, 2009.

TB&W will continue to allow non-traditional credit for those borrowers with no useable credit for the loan programs that allow the use of such credit in accordance with published guidelines. TB&W is fully aware that these limitations may result in the inability for a particular loan to meet these specified deadlines. TB&W will work as diligently as possible to accommodate all loans in the pipeline. We will be unable to grant any extensions or exceptions to these requirements.

Indiana FHA Streamline Refinance: What Happens Now?

Remember, according to FHA guidelines, the FHA Streamline refinance program doesn’t officially require a minimum credit score – but now virtually all lenders require a minimum of a 620 credit score. TB&W was the last major US lender who was not requiring a minimum credit score. It is possible that there are still smaller lenders who can offer the Indiana FHA refinance streamline loan with no minimum credit score requirement, but don’t expect it to be easy to find them.

For anyone who may be considering buying their first home here in Indiana, the Federal Government has helped “make the deal sweeter” by offering anyone who qualifies as a first time home buyer in Indiana to receive a $8000 tax credit directly from the IRS.

As you can imagine, this is a popular topic for many soon to be first time homeowners here in Indiana and many people have questions. This is why we have put together some of the best information we could find here about questions people had about the 8000 tax credit for Indiana first time home buyers.

Federal Housing Tax Credit.

Since some people like to watch videos rather than read, we also found this helpful video:

We realize that you may have more questions about the 8000 tax credit, but here are some of the most popular questions (and answers) regarding the 8000 tax credit that people are asking right here in Indiana:

1. Who is eligible to claim the tax credit?
2. What is the definition of a first-time home buyer?
3. How is the amount of the tax credit determined?
4. Are there any income limits for claiming the tax credit?
5. What is “modified adjusted gross income”?
6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
7. Can you give me an example of how the partial tax credit is determined?
8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
9. How do I claim the tax credit? Do I need to complete a form or application?
10. What types of homes will qualify for the tax credit?
11. I read that the tax credit is “refundable.” What does that mean?
12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
16. I am not a U.S. citizen. Can I claim the tax credit?
17. Is a tax credit the same as a tax deduction?
18. I bought a home in 2008. Do I qualify for this credit?
19. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
20. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
21. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?