South Pacific Financial offers no-minimum FICO scores for FHA loans.
Beginning Jan. 20, South Pacific Financial Corporation (SPFC), Irvine, California, adopted a new credit policy where the lender would require no minimum FICO[R] score for Federal Housing Administration (FHA) loans that win FHA system approval.
Michelle Millwood, underwriting manager at SPFC, explained, "As long as a borrower receives an automatic approval through the FHA's automated underwriting system, there's no FICO score requirement." Millwood was among the team that developed the new product guidelines.
SPFC Chief Executive Officer John Johnston said, "This program brings a great deal of relief for the most underserved of all borrowers--those currently with FICO scores below 620."
Johnston added, "We're excited to launch this new program, knowing most lenders want to see a credit score of 620 or higher on their FHA loans. Not so at SPFC."
A press release from the company noted some numbers that show how few loans are getting approved with FICO scores below 620.
According to the SPFC release, Fannie Mae says loans with a FICO score of less than 620 currently account for only 1 percent of its business. And as of December 2014, Freddie Mac said loans with a borrower FICO of less than 620 account for about 3 percent of its single-family portfolio.
Tight credit conditions have contributed to a lower share of first-time buyers in recent years, with rising minimum FICO scores being one of the barriers.
CEO Johnston noted, "This makes for a tough lending environment, especially when you consider that more than a third of all consumers have FICO scores below 650."
South Pacific Financial Corporation is a retail-only direct lender that primarily serves the western United States in nine states. It is focused primarily on serving the mortgage purchase market where 85 percent of its business comes from.
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|Title Annotation:||NEWS ROOM; Federal Housing Administration|
|Comment:||South Pacific Financial offers no-minimum FICO scores for FHA loans.(NEWS ROOM)(Federal Housing Administration)|
|Article Type:||Brief article|
|Date:||Feb 1, 2015|
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