South Pacific Financial Corporation announces no minimum FICO score on all FHA-approved loans

This change will be effective on all FHA loans underwritten on or after January 20, 2015.

Irvine, Calif., Jan. 20, 2015 /PRNewswire/ -- South Pacific Financial Corporation (SPFC) has announced a credit enhancement to its Federal Housing Administration (FHA) guidelines. Effective January 20, 2015, there will be no minimum FICO score necessary with loans that meet FHA system approval.

“As long as a borrower receives an automatic approval through the FHA’s automated underwriting system, there’s no FICO score requirement,” said Michelle Millwood, AVP Underwriting Manager at SPFC, and a member of the team that helped develop the new product guidelines.

“This program brings a great deal of relief for the most underserved of all borrowers — those currently with FICO scores below 620,” said SPFC CEO John Johnston. “We’re excited to launch this new program knowing most lenders want to see a credit score of 620 or higher on their FHA loans. Not so at SPFC.”

Giving the housing market a much-needed boost
“This is something much needed in the housing marketplace,” said Dan Manginelli, SPFC Executive Vice President. “I think we’re opening up a lot of possibilities for borrowers who may have had some hiccups in their past. And though they’ve gotten past that, their credit scores don’t reflect that yet. This new program is here to help them.”

How underserved is the market for those seeking to purchase a home with a FICO score of less than 620? Fannie Mae says loans with a FICO score of less than 620 currently account for only 1% of its business.

The numbers at Freddie Mac are slightly higher. As of December 2014, about 3% of its single-family portfolio had a FICO score of less than 620. Conversely, those with a higher FICO score above 700 accounted for 78%.

Data shows FICO requirements trending even higher
As if the headwinds weren’t strong enough, recent trends show FICO scores are inching upward.

According to a recent NAR survey, the market for borrowers with FICOs between 620 and 720 shrank from 95.7% to 80% and the willingness to lend to this group declined by 15%.

The median FICO score for FHA loans has been rounding up as well. According to a recent Mortgage News Daily article the FHA’s median FICO score at origination has climbed from 645 in 2007 to its current level at 684.

Given this lending environment, first-time homebuyers are feeling the crunch. According to NAR’s 2014 Profile of Home Buyers and Sellers, the share of first-time buyers fell from 38% in 2013 to 33% in 2014. That’s the lowest level in 27 years.

“This makes for a tough lending environment, especially when you consider that more than a third of all consumers have FICO scores below 650,” said Johnston. “Many of those are being left out of the current housing market. We’re here to help turn that around.”

About South Pacific Financial Corporation
Founded in 1982, Irvine, CA-based South Pacific Financial Corporation (SPFC) offers a diverse array of mortgage loan programs at competitive rates. At SPFC, we understand that we reach our goals by helping others reach theirs. Our core values are to do what is just, right and fair for our customers, employees, and business partners, while trusting them to do the same in return. In Mortgage Executive Magazine (2014), SPFC was voted one of the 50 Best Mortgage Companies to Work for in America.

For more information on SPFC, call (949) 365-4959 or visit

a437ef47 9839 4ce1 a7bd 6039cf7d5e93 2bb83f7f 241e 4620 87b3 e46ebc03c237 92badf1d 042c 4b16 9688 caa0ac1bae5a fa5006db c061 4cc5 8f5e 67709801996a 1fc01b4b 299e 441d b336 d23df0ebf6ac 119ba821 a37f 4cc3 adee 373d80ab75b0 f8d32ec6 4275 4371 9d37 9c668888103e b2e18dc5 717e 45c6 848f aa32b5d046e3 932c2ef4 9195 4f18 a269 fd0bb8d0a3e0 aa0ec01a 19f2 4f30 9b24 6d614ab2e0aa c8e93811 0ec2 4cfd 9b5d 264c2ea8dd59 c6a681bd 5569 4323 bd11 3073c6b18879 da405100 13fb 4686 9031 0196ab90cbc4 e4aaa1fa d1d9 4c0a 9bbe a6509f1480fd 4a640923 0f67 46e1 a4dd 3382faa6b385 c13fd43f 45fd 4b7a aec4 e1deda923092 50bc8147 c865 404a a5f2 02ce1587390e ce6b7a51 a2cd 4bdb 9050 ca4b318ac346 e4eb1b33 ac98 4371 943d fa181caebc26 aff55852 cf45 4de3 ace6 c9f5134a8ffa 576d4ab6 5c7e 4457 a084 5f0b025c4ab9 7d381291 6745 4f7b 9ed9 0c1173aa4c56 3a4ea006 4b68 4b2f 921d 364b905198e7