New mortgages are being approved with lower credit scores, and FHA loans appear to be leading the shift, according to studies by credit developer FICO and other entities. New loans for borrowers with FICO scores reaching as low as the 400s jumped from 21.9 percent in 2009 to 29.7 percent last year according to the study. From January to March of this year, borrowers who were approved for FHA loans–which offer low down payment options for first-time home buyers–had an average credit score of 672, according to FHA data.
