Comment Sought on Key Change in Manual Underwriting
January 3, 2014
The Department of Housing and Urban Development is seeking comment on a policy change that would reduce the FHAs credit-score threshold from 620 to 580 to allow more manually underwritten borrowers to use compensating factors that would help them qualify for an FHA-insured mortgage loan. The change would strengthen manual underwriting and reduce FHAs underwriting losses, resulting in more revenue per loan for FHA, HUD said. The FHA can control costs through risk management practices, the agency explained in a notice of rulemaking. The lower costs are a gain to FHA.