Does FHA require collections to be paid off for a borrower to be eligible for FHA financing?


 

 

Image result for fha guidelines on collection accounts

Does FHA require collections to be paid off for a borrower to be eligible for FHA financing?

A Collection Account refers to a Borrower’s loan or debt that has been submitted to a collection agency by a creditor.
If the credit reports used in the analysis show cumulative outstanding collection account balances of $2,000 or greater, the lender must:
•     verify that the debt is paid in full at the time of or prior to settlement using an acceptable source of funds;
•     verify that the Borrower has made payment arrangements with the creditor and include the monthly payment in the Borrower’s Debt-to-Income ratio (DTI); or
•      if a payment arrangement is not available, calculate the monthly payment using 5 percent of the outstanding balance of each collection and include the monthly payment in the Borrower’s DTI.Collection accounts of a non-borrowing spouse in a community property state must be included in the $2,000 cumulative balance and analyzed as part of the Borrower’s ability to pay all collection accounts, unless excluded by state law.   Unless the lender uses 5 percent of the outstanding balance, the lender must provide the following documentation:
•     evidence of payment in full, if paid prior to settlement;
•     the payoff statement, if paid at settlement; or
•     the payment arrangement with creditor, if not paid prior to or at settlement.For manually underwritten loans, the lender must determine if collection accounts were a result of:
•     the Borrower’s disregard for financial obligations;
•     the Borrower’s inability to manage debt; or
•     extenuating circumstances.

The lender must document reasons for approving a mortgage when the Borrower has any collection accounts. The Borrower must provide a letter of explanation, which is supported by documentation, for each outstanding collection account. The explanation and supporting documentation must be consistent with other credit information in the file.

For additional information see Handbook 4000.1 II.A.4.b.iv.(M); II.A.5.a.iii.(D), II.A.5.a.iv.(O)  at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
 
Joel Lobb (NMLS#57916)
Senior  Loan Officer
 
American Mortgage Solutions, Inc.
Company ID #1364 | MB73346
 


Text/call 502-905-3708
kentuckyloan@gmail.com

http://www.nmlsconsumeraccess.org/
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/
 
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

6 options for buying a home with little or no money down


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You’ve got great credit, a stable job, low debt, and money in the bank — but just not enough to make a down payment. Fortunately, there are many programs out there designed to give you that dream home with little to no money down.

Source: 6 options for buying a home with little or no money down

 

 

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Kentucky First Time Buyer Programs for 2015


Kentucky First Time Buyer Programs for 2015.

via Kentucky First Time Buyer Programs for 2015.

Kentucky FHA Mortgage Pre-Approval Checklist


Kentucky FHA Mortgage Pre-Approval Checklist.

via Kentucky FHA Mortgage Pre-Approval Checklist.

 

We basically look at the below items to get you pre-approved to buy a home.
Credit: Most lenders want a 640, but there are some lenders now doing FHA loans down to a 620 score with no bankruptcies or foreclosures in the last 3 year.
Assets: FHA loans require a 3.5% down payment, so depending on how much house you are trying to buy, you will need to put the minimum 3.5% down payment. Some programs are out there where you don’t need a down payment, USDA and KHC come to mind.
 In order to get you pre-approved, I will need the following items from you. This is a free process and I will give you a copy of your credit report for free. 

 

Kentucky Rural Housing Mortgage Loans Require No Money Down


 

100% Financing, No Money to closing Fast Approval, Low Fixed Payment USDA Loans
Kentucky Rural Housing Mortgage Loans
Kentucky USDA Guaranteed Rural Housing Loans
 
Did you know that home buyers can still get a mortgage with no money down, even with less than perfect credit? The Kentucky Guaranteed Rural Housing Loan Program offers these options in a wide range of areas, including many suburbs.

This loan program is offered through the Kentucky  Rural Housing Service, an agency of the U.S. Department of Agriculture and designed to assist low and moderate-income residents by providing better access to affordable housing finance options including little or no out-of-pocket costs in eligible areas.

  • To see if your market area falls in a designated Kentucky USDA Rural area, visit:http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
  • Available to low- and moderate-income borrowers whose adjusted income is equal to or less than 115% of the area median income
  • Owner-occupied single family non-farm residences, approved condos and PUDs
  • New construction properties are eligible
  • Home buyers can finance up to 100% of the market appraised value, including all recurring and non-recurring closing costs, in some circumstances Loan amounts as high as $417,000 in the continental U.S. Higher in Alaska and Hawaii.
  • Credit scores as low as 620 No asset or reserve requirements. Gift funds are allowed

Call me today to learn more about this program.

 

 
Joel Lobb 
Senior  Loan Officer

(NMLS#57916)
 
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223

 phone: (502) 905-3708
 Fax:     (502) 327-9119
 
 Company ID #1364 | MB73346

 

 

What are the property requirements for a USDA Rural Housing Loan in Kentucky?


What are the property requirements for a USDA Rural Housing Loan in Kentucky?.

via What are the property requirements for a USDA Rural Housing Loan in Kentucky?.

Rural Housing announced today that the Kentucky eligible property map will NOT be changing

Kentucky First Time Homebuyer Pitfalls to Avoid


Kentucky First Time Homebuyer First Time Homebuyer Pitfalls to Avoid.

via First Time Homebuyer Pitfalls to Avoid.

 

kentucky First Time Homebuyer Pitfalls to Avoid

 
Joel Lobb
Senior  Loan Officer

(NMLS#57916)
 
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
 Fax:     (502) 327-9119
 
 Company ID #1364 | MB73346

 CONFIDENTIALITY NOTICE: