FHA Medical Collections

FHA medical collections October 15, 2013 - New FHA does not require collection accounts to be paid off as a condition of mortgage approval. However, FHA does recognize that collection efforts by the creditor for unpaid collections could affect the borrower’s ability to repay the mortgage.

If evidence of a payment arrangement is not available, the lender must calculate the monthly payment using 5% of the outstanding balance of each collection, and include the monthly payment in the borrower’s debt-to-income ratio.

New FHA Guidelines

FHA guidelines allows a borrower with a credit score of 580 to buy a home with only a 3.5% down payment. FHA guidelines allows a borrower with a minimum credit score of 580 to buy a home using their own funds for a down payment or the down payment funds can be a gift from a family member.

FHA guidelines allows a home buyer with a minimum credit score of 580 up to a 6% seller's concession. The seller's concession must be written into the sales contract.

2012 FHA guidelines requires a minimum credit score of 500 for all loans.

Home buyers with a credit score below 580 to buy a home using their own funds for a down payment or the down payment funds can be a gift from a family member.

New FHA Guidelines

2012 FHA refinance guidelines.

Home owners with a credit score above 580 can refinance up to a 97.75% loan-to-value. FHA guidelines allows up to 85% loan-to-value for a cash out refinance. Closing cost can be rolled into the new loan amount.

Home owners with a credit scores below 580 new FHA changes require a maximum loan-to-value of 90% for a rate and term refinance. And up to 75% cash out refinance with credit scores below 580.

Whether you're planing to buy your first home, refinance, lower your monthly payments, buy a second home, consolidate debt or get pre-approved for a mortgage. A perfect credit score is not needed for an FHA loan approval.

In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA loan than a for a conventional loan. Credit scores down to 530 are accepted if there are compensating factors that offset the credit risk.

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KEYWORDS:FHA Medical Collections, FHA Florida Medical Collections,

Updated September 2, 2014

* FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment

* FHA loan requirements new borrowers with less than a 580 credit score will be required to put down at least 10%

FHA Credit Score

Requires a minimum credit score of 500 to buy a home or refinance

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Collection accounts

A collection is minor in nature usually does not need to be paid off as a condition for loan approval

Bankruptcy

Chapter 7 Bankruptcy at least two years must have elapsed since the discharge date

Foreclosure

Foreclosure must have been resolved for at least 3 years 

  • Government loan: Seasoning is determined by the date the claim was paid
  • Loans other than Government: Seasoning is determined by the date of sale the lender sold the property

Short Sale

FHA guidelines requires three year past from the date of sale of the property

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