RP Funding on Home Financing Requirements:

Review of RP Funding Credit Requirements
Why Credit Scores, Ratios, and Past Borrowing History Matter

There are many factors that go into determining if a consumer is eligible for a new mortgage. For those looking to take the next step in home ownership, here are some of the basic requirements that RP Funding, a direct mortgage lender based in Central Florida, uses as a baseline.

RP Funding FICO Credit Score Requirements

RP Funding uses FICO scores to determine if a potential borrower’s credit meets their requirements. When an application is submitted, the lender pulls FICO scores from the three Credit Bureaus — Equifax, Experian, and TransUnion — and then applies the median score to qualify the borrower.

While RP Funding has set the minimum credit scores outlined below, their Credit Validation team reviews applicants for potential exceptions to these target minimums. Also offering a free six-month Credit Butler coaching program to help consumers qualify for a mortgage, RP Funding is more likely to grant credit score exceptions to consumers once they have completed the program.

Conventional Mortgage

Minimum Credit Score Requirement: 620

FHA Mortgage

Minimum Credit Score Requirement: 600

VA Mortgage

Minimum Credit Score Requirement: 600

USDA Mortgage

Minimum Credit Score Requirement: 660

Waiting Periods After Foreclosure, Bankruptcy, and Short Sales at RP Funding

After a bankruptcy, foreclosure, or short sale, RP Funding, like most lenders, has a minimum waiting period for consumers applying for a mortgage. However, RP Funding's Credit Validation department may be able to grant exceptions to these waiting periods when there are extenuating circumstances. Potential borrowers who have completed RP Funding's free Credit Butler program are more likely to be granted exceptions to these policies.

Conventional Mortgage

Bankruptcy Minimum Waiting Period: 4 Years

Foreclosure Minimum Waiting Period: 7 Years

Short Sale Minimum Waiting Period: 4 Years, Exceptions After 2 Years with Extenuating Circumstances and 700+ Credit Score

FHA Mortgage

Bankruptcy Minimum Waiting Period: 2 Years

Foreclosure Minimum Waiting Period: 3 Years

Short Sale Minimum Waiting Period: 3 Years

VA Mortgage

Bankruptcy Minimum Waiting Period: 2 Years

Foreclosure Minimum Waiting Period: 2 Years

Short Sale Minimum Waiting Period: 1 Year After Last Mortgage Late

USDA Mortgage

Bankruptcy Minimum Waiting Period: 3 Years

Foreclosure Minimum Waiting Period: 3 Years

Short Sale Minimum Waiting Period: 3 Years

How RP Funding Uses Debt-to-Income Ratios

When determining a consumer’s ability to repay a new mortgage, RP Funding first considers the percentage of the borrower’s combined gross income that will be used to pay the new mortgage. Second, they look at the overall percentage of gross income needed to pay all liabilities on the borrower's credit report, such as car payments and credit card balances. These ratios are referred to as a Housing Ratio (housing payment divided by gross income) and a Total Debt Ratio (all monthly payments from the credit report plus the new mortgage payment divided by the gross income), with the required minimums outlined below.

Conventional Mortgage

Maximum Housing-to-Income Ratio: 45

Maximum Debt-to-Income Ratio: 45

FHA Mortgage

Maximum Housing-to-Income Ratio: 40

Maximum Debt-to-Income Ratio: 50

VA Mortgage

Maximum Housing-to-Income Ratio: 40

Maximum Debt-to-Income Ratio: 50

USDA Mortgage

Maximum Housing-to-Income Ratio: 29

Maximum Debt-to-Income Ratio: 41

Need Help Improving Your Credit Score?

For many hopeful homebuyers, minimum credit requirements can stand in the way of being approved for a great loan. While most lenders are quick to deny an applicant who doesn’t meet credit qualifications, RP Funding has launched a free six-month Credit Butler program designed to help buyers boost their scores.

Who Qualifies?

The RP Funding Credit Butler Program was created for buyers who qualify for their home loan across all determining factors except credit score. This includes income, work history, debt-to-income ratio, and down payment funds.

How It Works

1. Set up your initial appointment. You’ll be assigned your own personal credit coach to work by your side throughout the entire process.

2. Analyze your current credit. Your credit coach will go over your credit report with you in depth to design a custom step-by-step program.

3. Take action. Follow your custom plan to see improvements in your score in as little as six months!

4. Stay on track. Your credit coach will follow up with you regularly to ensure you’re making progress towards your credit and homeownership goals.