What are FHA's policies regarding credit history when using the TOTAL scorecard?

The Mortgagee must evaluate the Borrower’s credit history in accordance with the Accept Risk Classifications Requiring a Downgrade to Manual Underwriting found in Handbook 4000.1 II.A.4.a.v.  If a determination is made that the mortgage must be manually downgraded, the Lender must cease its use of the Automated Underwriting System and comply with all requirements for manual underwriting when underwriting a downgraded mortgage. 

For additional information see Handbook 4000.1 II.A.4.a.v. and II.A.4.b.iii.  available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-04917