Credit and debt-to-income ratio requirements have been eased in the country’s most struggling real estate markets by Mortgage Guaranty Insurance Corp. The move is a result of market improvement.
Current guidelines require a minimum credit score of 720 in markets where restricted underwriting guidelines are in place.
The limitation applies to loans up to $625,500 that are secured by properties in Arizona, Florida and Nevada.
In addition, the maximum DTI ratio is 41 percent.
But that is changing, according to MGIC Bulletin #03-2012.
The Milwaukee-based mortgage insurer said it will now insure borrowers with credit scores as low as 700 in restricted markets.
The limit on DTI ratios is being raised to 45 percent as long as the interest rate and payment are fixed for at least five years.
MGIC said the changes were being made as a result of improving housing market conditions.
The relaxed guidelines impact mortgage insurance applications received on or after May 21.