FHA loan requirements after short sale 2017

FHA loan requirements after short sale 2017

Short sale

How long after a short sale do I have to wait to qualify for an FHA loan?

FHA guidelines lets you qualify for a loan after three years from a short sale. FHA guidelines requires a minimum three year past from the date of sale of the property. You will need to document when the lender sold the property after they took possession of the property.

FHA guidelines for short sale allows borrowers with a minimum credit score of 500 qualify for a FHA loan. After a short sale, above 580 credit score and three years past the sale date FHA allows only 3.5% down payment.

FHA loan requirements after short sale 2017

After the financial crisis of 2008 qualifying for a mortgage became a lot harder. If not for FHA many borrowers would not qualify for a mortgage. What makes FHA different than a conventional loan is the FHA will approve you and give a better interest rate with a lower down payment even if you have a low credit score.

When you compare FHA vs. conventional loans FHA loans win the down payment and credit score race hands down. FHA loans only requires a minimum down payment of 3.5 percent of the purchase price with a 580 credit score versus a conventional loan requiring between 5 to 20 percent down payment with a minimum 620 credit score.

The average credit score for an FHA loan is 680 well above FHA’s minimum credit score of 580 for 3.5% down payments, according to HUD.

FHA "Back To Work" Loan

Borrowers with a prior bankruptcy, foreclosure, 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.

New FHA loan requirements 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.

Credit score

New FHA announced a policy change to address risk and strengthen finances. FHA has changed the minimum credit score for new borrowers:

• 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%
• This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well
• HUD homes for sale in Florida

FHA loan requirements after short sale 2017

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