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

2587551b 3842 4f2e aba0 060efe1f37a9 4672904f 4f75 454e ab92 399607850e9c 88e9443f 98aa 4147 be0a eb6f98dcf4bf 95e762c6 8222 4cf4 a36a 8f983c4317a9 e58d6fd1 b198 42d9 8089 37bef711e5a6 b1d71979 75ae 4fcc a836 ee48763432dc 95746883 39f9 4421 8819 fd8cded97965 92fa04c6 dd92 47e1 96de c1632b3f00ee 8d17c76e d045 4645 9567 5714ed56fcb4 a80cf08d d518 41df 89b2 cc93e8d39f9d 84087ad6 ba09 4888 a057 35f6a4aebb5e eec4211e 2997 4058 bddf ee978debf52c e8cb368f ac06 41ce 98d2 193404541734 5bff92f6 99e7 427d 9214 78b30c30a6e8 157b7cbc 3caa 4b1d a657 4aee6af17dfd faf6672c 5084 4197 aa1a 79ca41e8cef0 34f23412 f2dc 439f 8277 d41ed1f85ace b84abef2 7080 4a9b bbba 431984116340 b40deaa4 18a3 4b48 bb67 64abb6a6d22e c802abcc 0a1c 450f b6f0 466523fb008e 379c67c6 cb1a 42b8 9d8f 9ab3f92aee12 514aa504 ec7d 4365 b40e 8c4223dbb8fa 41a2de83 adb4 46c2 9092 c7e745c38bad