FHA Guidelines On Foreclosure helps borrowers get loans
28 Mar

FHA Guidelines On Foreclosure

FHA Guidelines On Foreclosure

FHA Guidelines On Foreclosure: No Need To Panic

Since the economic downturn/Great Recession that happened over 10 years ago, there was a significant spike in the filings of bankruptcies, foreclosures, and short sales so there are pretty good odds that you and a lot of borrowers were affected by this and now have derogatory items on your credit report to show for it.  There is no a need to panic as these items will affect the time in which you can purchase a home again, but they will not prevent you from owning a home.  A common misconception I see from my borrowers is that they believe after a foreclosure, their ability to purchase a home is gone, but this is definitely not the case and in this article I will go over FHA Guidelines On Foreclosure.  

As you may or may not know, FHA Loans have some of the most borrower-friendly guidelines of any loan programs that may be available to you.  With FHA Loans you are able to get a home with a 3.5% down payment with only a minimum FICO credit score of 580.  This also translates over to the FHA Guidelines On Foreclosure because FHA allows for borrowers to go through derogatory items in their credit history, get themselves re-established, and allow them to be able to purchase homes again.

FHA Guidelines On Foreclosure: Mandatory Waiting Periods

The main thing you need to realize with FHA and the FHA Guidelines On Foreclosure is that there is first a mandatory waiting period that needs to be adhered to in order to allow for the borrower to have the opportunity to get themselves back on their feet.  The FHA wants to ensure you have made smart decisions with regards to your credit before they will allow you to purchase a home again.  The mandatory waiting periods after these events are as follows:

  • Foreclosure: 3 years after Sheriff’s Sale or from the date your name was removed from the deed.
  • Short Sale: 3 years after closing on the short sale
  • Chapter 7 Bankruptcy: 2 years after the discharge date
  • Chapter 13 Bankruptcy: no waiting period after discharge date and can be eligible after 12 months of on-time repayment plan

Lenders Without Overlays

If you want to maximize your potential at utilizing FHA Guidelines On Foreclosure then you need to make sure that you work with myself in conjunction with Fairway Independent Mortgage Corporation NMLS# 2289 as we don’t have lender overlays when it comes to these guidelines.  Now just because you know the FHA Guidelines from the 4000.1 Handbook, lenders are still able to require additional guidelines above and beyond the minimum guidelines.  When you see a lender that wants an additional waiting period or higher credit score then you have encountered lender overlays and you need to contact me immediately at 630-465-2656.  I only work with lenders that only follow the minimum guidelines on lending and this includes the FHA Guidelines On Foreclosure.  Yes, you may have run into some bad luck in the previous years, but everyone deserves a second chance and we are the ones to help get you back on your feet and in a new home within the FHA Guidelines.  I have worked with plenty of people who were adversely affected by the recession and had credit scores at or below 500.  I am different from other loan officers because I care about my borrowers and want to work with them in order to make home ownership possible. If you are ready to get started, please fill out an application today by clicking the link here.

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