Even with FHA, credit scores must be 580 now!

This just in from my underwriters...FHA used to not care about credit scores, if someone had a 540 (or no score, or lower!) but we could provide alternative documentation that their credit was OK for the last 12 months, regardless of what the credit report showed, we were OK. Not anymore, and I quote;

“Due to volatility in the FHA markets our investors have discontinued offering FHA loans below 580 regardless of Approve/ Eligible Status. This change includes any loans currently in the pipeline or any new loans that may have been submitted. Please pass along to the field. I can tell you also that the industry is changing regarding these. Both Countrywide and Chase have also eliminated doing FHA loans below 580. Plaza will not originate loans below 580. Any loan below a 580 that underwriting deems acceptable for an exception will be reviewed by underwriting management to determine if loan is acceptable. These loans will not be locked until an Approval has been issued.”