Higher credit scores needed for FHA-backed loans

Wells Fargo and Bank of America have tightened their standards for FHA-backed loans, says Bloomberg. Both banks now require applicants to have FICO scores of 640 or higher, instead of previously established minimum scores of 620. The move could exclude more than 6 million buyers who could qualify under earlier standards.

As the story explains, the FHA once operated without minimum score requirements, but started demanding scores of at least 580 for loans with 3.5-percent down payments. However, many lenders have required scores of 620 as far back as early 2009.

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