FHA Short Sale Guidelines

FHA Short Sale Guidelines

FHA allows you to purchase a home 3 years after short sale.

FHA guidelines 2016 minimum credit score is 500. In the old days FHA did not require a minimum score. These changes went in to effect in 2010.

To buy a home after a short sale FHA requires 3 years past since the date of the short sale.

Borrowers with scores above 580 require a 3.5% down payment. The funds can be a gift from a family member and up to 6% seller concession is allowed. 12 months of on time rental history payment will be required for scores below 640. If you do not have verifiable payment history 3 months of reserves will be required. Reserves must be the borrower's own funds.

If you have FICO scores below 580 new FHA changes require a 10% down payment. The funds can be a gift from a family member and up to 6% seller concession is allowed. 12 months of on time rental history or on time mortgage payment history will be required. If you do not have verifiable payment history 3 months of reserves will be required. Reserves must be the borrower's own funds.

Most lenders require a minimum FICO score of 640 for a FHA loan.

We don't. FHA requires a minimum credit score of 500.

Whether you're planing to buy a home or need to get pre-approved for a mortgage. A perfect FICO score is not needed for an FHA loan approval.

In fact, even if you have had credit problems, such as a short sale or bankruptcy, it's easier for you to qualify for an FHA loan than a for a conventional loan. Scores down to 500 are accepted if there are compensating factors that offset the credit risk.

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FHA Credit Score needed to buy
a house or refinance


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

FHA requires a minimum credit score of 500 to buy a home or refinance


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


What documentation will I need?

  • W2's or Personal tax returns for 2 years
  • Current pay stubs for the past month
  • Bank statements for last 2 months (all pages)
  • Clear copy of Driver’s License (front and back)
  • Clear copy of SS card (front and back)

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