Great news..  new policy took effect January 15.  Wells Fargo is providing FHA mortgages to borrowers with credit scores as low as 500.    Here is how the new policy works:

Credit scores of 500 to 579 - Borrower must have the ability to put down 10%.  Gifted or borrowed funds not allowed.

Credit scores of 580 to 599 - Borrrower must put down 5%.

Credit scores of 600+ - Borrower needs only to put down the traditional 3.5%.

The move comes after NAR (National Association of Realtors) and FHA Commissioner David Sevens, among others, criticized the countrys major banks for requiring too high of credit scores before making loans.

Obviously, the borrower would need to qualify with debt/income ratios and other lender qualifications. 

This is a step in the right direction.

Derek Gutting, The Gutting Group, Keller Williams Realty, www.Guttinggroup.com