3.5% down payment with a 580 credit score.

FHA allows you to buy a home with only 3.5% and a 580 credit score. Most lenders require 620-640 credit score, but there are lenders that will go down to a 580 credit score.

When you have a 580 credit score you can buy a home with 46.9% (mortgage only payment) /  56.9% (All other debts including the mortgage payment) debt to income ratios with an automated approval (AUS). If you get turned down with an automated approval which a lot of people do, you can go with a manual underwrite. This type of underwriting will limit your debt to income ratios to a 40%  / 50% with 2 compensating factors. It you have 1 compensating factor you cannot go above at 47% debt to income ratio. If you have no compensating factors you will not be able to go above a 43% debt to income ratio. There a 5 compensating factors the FHA allows. They are 3 months of your mortgage payment, enough residual income, no other debts besides your new mortgage, rent is same as your new mortgage payment & you have other income that we are not using to qualify you. Barclay Butler Financial does these loans. # 580creditscore, #3.5%down.