Great news for first time buyers with less than stellar credit and little cash on hand, the credit score requirements with some lenders have become more favorable! Two of the largest lenders recently announced (with very little publicity) that the “overlay” requirements (lender mandated requirements that supersede FHA guidelines) on fico scores.

The two participating banks are Wells Fargo and Quicken Loans, and the new minimum requirements are a 580 fico score and 3.5% down payment.Let me repeat that: THE NEW MINIMUM REQUIREMENTS ARE A 580 FICO SCORE AND 3.5% DOWN PAYMENT!!!! That is down considerably from a previous minimum fico of 620.The reason lenders had gave prior for imposing higher guidelines was that they need an extra cushion of protection to shield them from borrows with a higher risk of default. The “overlays” contributed to the cost of obtaining a loan in the form of points and fees.

As everyone knows, many have gone through financial difficulties over the past few years, which has affected credit scores and decimated bank statements. It is refreshing news to hear that some lenders are willing to take a calculated risk, and present a scenario where both the borrower and lender win.

Buying your first home? Selling your house? Looking to relocate? Give me a call,   Carlos J. Amador at (562) 833-4292 or visit my website For a no obligation free consultation.Free first time home buyer information for Fullerton, Anaheim, and Brea.