Good news for home buyers – particularly those without a lot of down payment cash on hand. Wells Fargo and Quicken, two of the largest FHA-approved lenders, have backed off their “overlay” requirements on FICO scores of potential home buyers. Lender overlays are qualifications that have been more stringent than FHA’s own requirements – something that has proven quite controversial.
Now both lenders will loan to applicants with FICO scores as low as 580, with 3.5% down payments.
This bodes especially well for the real estate market as a whole, as loan applications will surely be on the rise again as the door to home ownership is opened wider for more buyers. Wells is the largest originator of FHA-insured mortgages and Quicken, the third largest. Wonder what #2 has to say about all this?!
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