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FHA and Subprime

December 12, 2013

The Office of the Comptroller of the Currency (OCC) Mortgage Metrics Report uses standardized definitions for three categories of mortgage creditworthiness: prime, Alt-A, and subprime. These are defined using ranges of FICO credit scores at the time of origination: prime is 660 and above; Alt-A is 620 to 659; and subprime is below 620.

According to FHA’s FY 2013 Q3 Report to Congress, the average FICO score of an FHA borrower through June 2013 was 693. The average FICO score on denied FHA applications was 667 as of October 2013, well above scores that are defined as subprime.  Less than 3% of all FHA borrowers have credit scores that are considered subprime (below 620).