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Buy a Florida home with NO CREDIT SCORE!
Florida home with NO CREDIT SCORE!
FHA home loans were created to help increase homeownership. Florida homebuyers without a credit score can qualify for FHA financing using non traditional credit as a means of showing the lender your willingness and ability to make your monthly payments in a timely manor.
Evaluating Non Traditional Credit
When Florida mortgage lenders evaluate a borrowers non-traditional credit histories, a satisfactory payment history of at least 12 months must include the following.
No history of delinquency on Florida rental housing payments No more than one 30-day delinquency on payments due to other creditors, and No collection accounts/court records reporting (other than medical) filed within the past 12 months. Evaluating Florida Home buyers with Insufficient Credit
When evaluating borrowers with no credit references, or otherwise having only Group II references as outlined below, a satisfactory credit history, at least 12 months in duration, must include one of the following:
Group Number
Types of Credit References
Group I
Rental housing payments (subject to independent verification if the borrower is a renter), utility company reference (if not included in the rental housing payment), including gas electricity water land-line home telephone service, and cable TV.
Note: If the borrower is renting from a family member, request independent documents to prove regularity of payments, such as cancelled checks.
Group II
Insurance coverage (for example, medical, auto, life, renter’s insurance (not payroll deducted) payment to child care providers – made to a business providing such services school tuition retail stores – department, furniture, appliance stores, specialty stores rent to own – (for example, furniture, appliances) payment of that part of medical bills not covered by insurance Internet/cell phone services a documented 12 month history of saving by regular deposits (at least quarterly/non-payroll deducted/no NSF checks reflected), resulting in an increasing balance to the account automobile leases, or a personal loan from an individual with repayment terms in writing and supported by cancelled checks to document the payments.
no more than one 30-day delinquency on payments due to any Group II reference, and no collection accounts/court records reporting (other than medical) filed within the past 12 months. Underwriting Guidance for Florida mortgage applicants with Insufficient Credit
In order to enhance the likelihood of homeownership sustainability for borrowers with insufficient credit histories, the underwriting guidance below is provided.
Qualifying ratios are to be computed only on those occupying the property and obligated on the loan, and may not exceed 31 percent for the payment-to-income ratio and 43 percent for the total debt-to-income ratio. Compensating factors are not applicable for borrowers with insufficient credit references. Borrowers should have two months of cash reserves following mortgage loan settlement from their own funds (no cash gifts from any source should be counted in the cash reserves for borrowers in this category).