All the hype over FHA's "reforms" is missing a few facts. Yes, FHA now requires a 580 or better credit score if you want to put 3.5% down instead of 10%. And yes, those with scores less than 500 are now ineligible for FHA financing. But have things really changed in practice? No, they have not.

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FHA theoretically allows you to get a mortgage if you have a 500 credit score. To have a score in the low 500's you have to have a lot of ugliness in your history -- months of late payments, maxed out credit cards, a few collections, maybe an unsatisfied judgment in there somewhere. And FHA guidelines require underwriters to evaluate your credit history and determine if you are willing and able to pay your debts. A history littered with collections and late payments does not point to a successful mortgage experience.

But enough theory and conjecture. Here are the hard cold facts:

Between April 1st and June 30th (second quarter) of 2010, before the 500 score limit went into effect, not one FHA loan was funded for anyone with a score of less than 500. Not one. In addition, less than 1% of borrowers scored below below 580, and most loans went to borrowers with scores above 620. the average FHA borrower today has a score of 693 in fact.

FHA has reason to be concerned. During May 2010, 8.97% of all FHA loans were seriously delinquent. That was an increase from 7.93% the year before. But defaults have decreased since January 2010, when they peaked at 9.16%.

Foreclosure claims have drained FHA's reserves, which are funded by mortgage insurance premiums, to below the 2% minimum mandated by Congress. Taxpayer money could be in jeopardy if the insurance funds are depleted any further, so the agency has taken steps to prevent this.

Those steps mean that those who don't meet FHA's higher standards will be relegated to bad credit mortgages if they can find them. To see what's available if your credit score isn't up to FHA standards, complete the inquiry form on this site.