Buying a house soon! Need some advice on whether we might qualify for FHA loan or not!?

My husband and I are starting the pre-approval process for a home loan. We'll be first-time buyers. We live in Texas, so we'll be able to use the $8000 tax credit as a downpayment on a FHA loan, if we qualify.

We make almost $85,000 a year between the two of us and want to purchase a $165,000 home. Our credit scores are 599 and 555 right now, but we have a bunch of items on our credit reports that we are disputing currently to try to clean it up.

Does anyone think we'll qualify for a FHA loan?


Army Wife - I'm not sure where you looked, but here it is. You can get a bridge loan and use the entire tax credit as downpayment.

7 Answers

  • 1 decade ago
    Best Answer

    Your scores are way too low and you can not use the 8,000 as a down payment, you can apply it towards your down payment but you must still come up with 3.5% for the down payment. This is directly from their website

    Although the credit cannot be used towards the minimum down payment of 3.5%, under the new guidelines, home buyers may apply for it to be used as an additional down payment or towards other closing costs. So, the borrower must still provide the initial 3.5% from acceptable sources.

  • 1 decade ago

    FHA itself won't disqualify you with those low scores but the banks will. Each bank has the right to determine the lowest score they will accept and it is rare a bank will approve anyone under 620. If you can clean up your report in time, you may be okay but it can take a long time to improve your credit, especially if you are disputing errors on the report. If you only have the tax credit to use as downpayment, the bank may be even more reluctant.

  • Anonymous
    1 decade ago

    Sorry BBJ but Armywife is correct. Here is a portion of the text from the site you posted:

    The Department of Housing and Urban Development announced those using FHA lenders and HUD-approved non profit agencies are eligible to take advantage of the 2009 First Time Home-buyers Tax Credit in a new way--****as part of the down payment****.

    The 2009 tax credit for first time home-buyers provides a tax break totaling 10% of the purchase price of the home with a maximum tax credit of $8000. (The amount may be less depending on the purchase price.) For those applying for an FHA mortgage, *****that entire amount can be used for at closing time********

    Now read that closely and you will notice that the way it's word is intentional vague. It states "as part of the down payment" meaning you would need the minimum 3.5% and then "that entire amount can be used at closing" Of course the entire amount can be used at closing but that only means you can use it cover your closing costs and any down payment in excess of the 3.5% required. Also notice that the website you listed is a .com site while this one (,80268... is a .gov site

    To get the truth visit the site listed above.

    Source(s): I'm a mortgage banker/broker,80268...
  • 1 decade ago

    I know there is a '45 day window' before any changes will be made to your credit score. You can contact companies; such as Credit Improvers & they can sometimes up your credit score so many points between 30 & 45 days. But is does cost around $200. There are very few companies that will except the 599 score as long as you meet all other requirements.

    Source(s): Personal Experience
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  • 1 decade ago


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