December 11, 2013
A borrower whose previous residence or other real property was foreclosed on or has given a deed-in-lieu of foreclosure within the previous three years is generally not eligible.
Foreclosure must have been resolved for at least 3 years with no late payments since the date of resolution.
Seasoning Requirements are determined by the type of loan:
Borrowers with a prior foreclosure, bankruptcy, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the bankruptcy, foreclosure, deed-in-lieu, short sale was the result of a documented extenuating circumstance.
Borrowers may also be eligible for an FHA insured loan on a purchase transaction after 12 months from the completion, discharge, trustee's sale if the borrower meets the requirements for extenuating circumstances Economic Event.
To buy a home after foreclosure you must have a minimum down payment of 3.5% if your credit score is above 580. The down payment must be the borrowers own funds or can come from a gift.
Borrowers with credit scores below 580 must make a 10% down payment.
FHA loans have been helping people become homeowners since 1934. A perfect credit score is not needed for an FHA loan approval. In fact, even if you have had credit problems, such as a foreclosure, it's easier for you to get an FHA loan than a conventional loan.
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