Requirements FHA Loan

Requirements FHA Loan

Requirements FHA Loan - January 20, 2010 FHA announced a set of policy changes to strengthen the FHA. The changes announced are the latest in a series of changes enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.

The FHA has taken the following step:

• Update the combination of FICO scores and down payments for new borrowers
• New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program
• New borrowers with less than a 580 FICO score will be required to put down at least 10%

No Credit History

Three lines of credit are necessary to apply for an FHA loan. However, in the event a borrower does not have sufficient credit on their credit report the FHA will allow substitute forms. FHA allows minimum trade lines if you have credit scores.

Late Payments

During an underwriter analysis of borrower credit, the overall pattern of credit behavior is being reviewed rather than isolated cases of slow payments. If a good payment pattern has been maintained, regardless of a specific period of financial difficulty preceded it, the borrower may escape disqualification.

Collection, Judgments, Federal Debts

A collection is minor in nature usually does not need to be paid off as a condition for loan approval. It is stated as such in FHA guidelines. Any judgments will have to be paid in full prior to closing. Borrowers who are delinquent on any federal debt, such as tax liens, student loans, etc., are not eligible.

Chapter 7 Bankruptcy

At least two years must have elapsed since the discharge date of the borrower and / or spouse's Chapter 7 Bankruptcy, according to FHA guidelines. This is not to be confused with the bankruptcy filing date. A full explanation will be required with the loan application. In order to qualify for an FHA loan, the borrower must qualify financially, have re-established good credit, and have a stable job.

Short Sale

FHA guidelines 2016 short sale lets you qualify for a FHA loan after three years. FHA guidelines short sale 2016 allows borrowers with a minimum credit score of 500.

Foreclosure

Waiting period FHA loan after foreclosure 2016 is three years. FHA guidelines are clear about the need for the re-establishment of positive credit from the time of the foreclosure.

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