Wells Fargo Lowers Credit Requirement for FHA Loans

Wells Fargo & Co. has dramatically lowered credit score requirements for Federal Housing Administration (FHA) mortgages, the first major lender to do so following pressure from the agency and housing advocates.

Beginning last month, Wells began accepting applications in its retail branches for FHA loans from borrowers with FICO scores as low as 500. Previously, it required a score of at least 600 for retail FHA borrowers. The minimum FICO score remains 640 at the company’s wholesale and correspondent channels.

For borrowers with credit scores ranging from 500 to 579, a 10 percent down payment is required, and the down payment may not be a gift or be part of a down payment assistance program.