The rate of home-ownership in this country is at a ten-year low according to the Census Bureau, primarily due to a rise in the rate of foreclosures. And now the fading dream of owning a home may have to be put on hold a little longer, at least for some Americans, as two of the nation's largest lenders tighten their standards on loans insured by the Federal Housing Administration (FHA).

According to Bloomberg, Wells Fargo and Bank of America have raised the minimum required credit score on FHA-insured loans that they will buy to 640 from 620, which is far beyond what the FHA requires. That may not seem like such a big deal but it is for the 6.3 million Americans whose FICO scores just so happen to fall within that range.

FHA loans account for one in five of all home purchases and recently imposed minimum credit score requirement of 500 for most loans and 580 for loans that had smaller down payments of between 3.5% and 10%. Before then there was no minimum credit score for an FHA loan, but it was just that sort of lax oversight that contributed to the sub-prime mortgage mess.

As you may or may not know, credit scores as configured by FICO, range from 300 to 850. They're based on data such as whether borrowers have missed debt payments, balances on their credit cards relative to borrowing limits, and the length of their credit history.

Requiring a 640 credit score will eliminate as many as 15% of all FHA borrowers. FHA commissioner David Stevens says the hardest hit will be "minorities and any borrowers in communities hardest hit by the recession. In an interview with Bloomberg, Stevens said "we need to find a better way to provide access to these families who are being cut out simply because lenders are putting arbitrary overlays on top of our requirements.”

The increase in minimum credit scores by Bank of America and Wells Fargo have prompted smaller lenders to follow suit. Quicken Loans, which is the ninth-largest lender, has ended most of its FHA lending to borrowers with scores below 640. JPMorgan Chase, the third-largest lender, had already been generally requiring credit scores of at least 640 on FHA loans even before Wells Fargo and Bank of America raised their minimums.