Showing posts with label FHA Mortgages and Bankruptcy. Show all posts
Showing posts with label FHA Mortgages and Bankruptcy. Show all posts

Kentucky Bankruptcy Guidelines for Kentucky Conventional & Kentucky FHA Mortgage Loans

Can you buy a home while in bankruptcy in Kentucky?



KENTUCKY MORTGAGE WITH A BANKRUPTCY

KENTUCKY MORTGAGE WITH A BANKRUPTCY



Bankruptcy Chapter 7


Kentucky Fannie Mae Guidelines for a Previous Chapter & Bankruptcy:




4 years from discharge or dismissal date
2 years from discharge or dismissal date it borrower meets FNMA definition for Extenuating Circumstances
5 years if more than one bankruptcy was filed within the last 7 years


Kentucky FHA Guidelines for a Past Bankruptcy Chapter 7


2 years from the discharge date for DU approval. Case number assignment cannot be ordered until wait period has elapsed
Manual underwrites are allowed on a refer/eligible DU finding as long as 2 years has elapsed from the discharge date and the borrower has either re-established good credit or chosen not to incur any new credit obligations
Exception for 2 year wait period:
An elapsed period less than 2 years but no less than 12 months may be acceptable
The borrower must document the bankruptcy was caused by extenuating circumstances beyond their control such as a serious illness or death of a wage earner
The borrower must document an ability to manage their financial affairs in a responsible manner
Divorce, loss of a job, or inability to sell a home after relocation is not an acceptable extenuating circumstance


Bankruptcy Chapter 13


KY Fannie Mae Bk Guidelines for Chapter 13 Bk


2 years from discharge date
4 years from dismissal date
2 years from dismissal date it borrower meets FNMA definition for Extenuating Circumstances 5 years if more than one bankruptcy was filed within the last 7 years


Kentucky FHA Mortgage Guidelines for Chapter 13


2 years from the discharge date for DU approval. Case number assignment cannot be ordered until wait period has elapsed
Manual underwrites are allowed 1 day after discharge date or at least 12 months of the payout period under the bankruptcy has elapsed at the time of case number assignment
Must receive a refer/eligible DU finding
Must have documentation of 12 months satisfactory payment history
Must have written permission from trustee to enter into new mortgage transaction

Kentucky FHA Mortgage Guidelines


Kentucky FHA Mortgage Guidelines


The credit score requirements for Kentucky FHA home loans:



FHA says on paper in their written guidelines that they will insure a FHA loan down to 500 - 579 with a 10% down payment or 580+ with a 3.5% down payment. However, in the real world of lending in the secondary market, most lenders will not adhere to these guidelines.
Most FHA investors will want a 620 middle credit score, but they're a few that will go by the written FHA guidelines above for credit scores, but very few. Your best bet is to get with a loan officer and get your scores up to at least 580 so you can have a better shot of getting approved and access to more FHA lenders.


Bankruptcy Requirements for Kentucky FHA Home Loans:



FHA states in their published guidelines that if you had a Chapter 7 Bankruptcy, you must wait 2 years from the discharge date to reapply for a FHA insured mortgage loan.


If you had a Chapter 13 Bankruptcy and have a 12 month on-time payment history with the courts, you can potentially get approved for a FHA loan if you get permission from the trustee and qualify with the Chapter 13 payment plan in your debt-to-income ratio. If you have been in the plan for over 12 months, and have a good pay history, you can submit your paperwork for FHA approval.


For example, let's say you have been in the Chapter 13 repayment plan for 3 years and you want to buy a home using FHA financing. You could go ahead and petition the Chapter 13 trustee for approval from the courts to get a home loan. The trustee of the Chapter 13 courts will want to know your new loan payment with the home loan, so make sure you know how much you want to borrow before you apply,.


Collections on Credit Report Requirements for Kentucky FHA Home Loans:


:
If the credit report shows a cumulative balance of $2,000 or more for collection accounts:
The debt(s) must be paid in full prior to or at closing, or
Payment arrangements must be made with the creditor and the monthly payment included in the DTI, or
A monthly payment of 5% of the outstanding balances of each collection must be included in the borrower’s DTI.
Collection accounts of non-borrowing spouses 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. Community property states are Arizona, California, Texas, Washington, and Wisconsin



Short-sale or Foreclosure Guidelines for a Kentucky FHA Loan:



If you have experienced a short-sale or foreclosure, FHA states that you must wait 3 years from the date of the sale to obtain FHA financing again. And important note is this: The waiting period starts not when you were discharged from the home or bankruptcy, the waiting period starts when the home is sold and the deed transferred at the courthouse. This is important to remember because a lot of people think it starts when they vacate the home or when there bankruptcy is discharged if the mortgage was in the bankruptcy, but it does not!!! The date used to end the waiting period starts when the deed is transferred at the courthouse from the owner to back to bank or whomever buyus the home in the default.


Delinquent Federal Debt (Taxes, Student Loans) Kentucky FHA Loan Requirements:



If you have a delinquency with the Federal Government, this could hurt your chances of getting approved for a FHA backed Mortgage Loan. Here is why:


All FHA participants are ran through the CAVIRS Alert System administered by HUD to check to see if the mortgage applicant is delinquent to the Federal Government. This usually arises from an IRS income tax lien, overpayment on a social security claim, or lastly, a defaulted student loan.
A lot of the times FHA borrower don't realize that if they don't pay there Federal backed student loans, they go into default and this will hold you up from getting a FHA loan or possibly they will hold your tax refund.
If you have been delinquent on your student loans, you have to call and get on a 9 month repayment plan with them and they will clear you of your CAVIRS Alert. The payment plan can be as little as 5 or $10 a month, but the important thing is to get started so this will improve your credit rating too along with releasing the liens against you for other federal assistance like tax refunds, social security payments and benefits to name just a few.


I have done many FHA loans in Kentucky where they have rehabbed their student loans if they are backed by Federal government and got them loan after 9 months.
If you happen to have an agreement already worked-out with the IRS or student loan creditors, sometimes we can take that arrangement and get you approved sometime with FHA depending on the lender.


Child Support Obligations Kentucky FHA Loan Requirements:



If the credit report shows a delinquent child support agreement, the FHA Government Underwriter will want to see the current child support agreement and what the monthly payment is so as to make sure they have your debt-to-income ratio figured correctly. You can have a delinquency report of child support on your credit report and still get an FHA loan.


It is okay to be paying child support, a lot of times it shows on a borrower's paystubs, and if so, we simply use that child support obligation to use for debt-to-income ratio qualifying.






Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916


American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

click here for directions to our office

Text/call: 502-905-3708

Buy a Home Again After Foreclosure Short Sale or Bankruptcy FHA Conventi...

FHA Mortgage Guidelines for a Louisville Kentucky FHA Mortgage


FHA Mortgage Guidelines for a Louisville Kentucky FHA Mortgage



FHA expands mortgage backing to the once bankrupt | 2013-08-16 | HousingWire

FHA has issued 3 mortgagee letter out this week, with big changes coming on October 15th! FHA will now allow serious job loss or income reduction (20% reduction in income)to be counted as an extenuating circumstance. Buyer might be eligible to purchase a new home after a 12 month waiting period with excellent re-established credit and documentation of income loss and credit counseling. Stay tuned! More info to come but this will certainly help get more buyers into the market in our area.


According to a letter sent to mortgage lenders, the FHA said it would offer mortgage insurance to borrowers who, during the recession, filed for bankruptcy or lost their homes through a foreclosure or short-sale proceeding.
The insurance is now available to those who can prove they are no longer financially compromised — and met all other FHA requirements.
"FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage," the letter says.
Besides the burden of proof on the borrower to demonstrate a recovery from the "economic event," the potential homeowner must also complete housing counseling. This event would need to result in a minimum loss of 20% of the household income.
-- 
Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
kentuckyloan@gmail.com

FHA expands mortgage backing to the once bankrupt | 2013-08-16 | HousingWire
FHA expands mortgage backing to the once bankrupt | 2013-08-16 | HousingWire


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Louisville Kentucky FHA Mortgages and Bankruptcy

Louisville Kentucky FHA Mortgages and Bankruptcy/Guidelines



Louisville Kentucky FHA Guidelines



Guide to Louisville Kentucky FHA Mortgages and FHA mortgage underwriting for purchase, streamline & standard refinance.

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Below, you will find a guide to the “standard” Louisville Kentucky FHA Mortgages FHA loan guidelines used in the underwriting process of an FHA mortgage. (Louisville Kentucky FHA Mortgages(



•Traditional Guidelines:

◦Neither the lack of traditional credit history, nor the lifestyle of the borrower may be used as a basis for rejection.

◦Collections: Based upon the surrounding circumstances, and as determined by our underwriter, these do not necessarily have to be paid.

◦Judgment: Judgments are required to be paid off before the mortgage loan is eligible for insurance. However, exceptions can be made if the borrower has been making regular timely documented payments and the creditor is willing to subordinate the judgment to the insured mortgage.

◦Foreclosure: A borrower whose previous residence or other real property was foreclosed on, or who has given a deed-in-lieu of foreclosure within the previous three years is not generally eligible. Exceptions can be made based upon extenuating documented circumstances.

◦Chapter 7 Bankruptcy: Will not disqualify a borrower if at least two years have passed since the bankruptcy was discharged.

◦Chapter 13 Bankruptcy: A borrower paying off debt under Chapter 13 may also qualify if at least one year of the pay out period has elapsed with satisfactory payment performance and the court approves the borrower entering into a mortgage transaction.

•Aliens: FHA will insure mortgages made to lawful permanent resident aliens under the same terms and conditions as a US citizen.

•No Income Restrictions.

•Higher Ratios: HUD‘s standard ratio guidelines are 29% (maximum exception of 36%) of your gross income for housing and 41% (maximum exception of 50%) of your gross income for housing plus other creditors. Borrowers may, at the underwriter’s discretion, be allowed to extend beyond these ratios based upon sufficient compensating factors.

•Down Payment: The minimum down payment is approximately 3.5%. While credit quality can affect this qualifying requirement, the typical borrower only needs the standard HUD guideline of 3.5% to be approved.

•Gifts: 100% gift funds are acceptable. The donor may be a relative of the borrower, the employer or labor union, a governmental agency, a not for profit private organization, or close friend with a clearly defined interest in the borrower. No repayment of any gift may be expected or implied. Sellers are allowed to pay all closing costs on behalf of the borrower, up to 6% of the purchase price.

•Reserves: There are no reserve requirements for one and two-family unit residences. Three months reserves are required for three and four-family unit residences.

•Multifamily: Three and four family unit residences, regardless of occupancy status, must be self-sufficient. The maximum mortgage is limited so that the ratio of the mortgage payment, divided by the monthly net rental income does not exceed 100%. The net rental income is the appraiser’s estimate of fair market rent from all units (including the unit chosen by the borrower for occupancy), less the allowance for vacancies and maintenance (which is 15%). 85% of the rental income that is expected from the non-occupied units is added to the borrower’s income for qualifying purposes. Down payment is calculated the same as single-family units.

•Overtime, Bonus, and Part-time Income: Overtime and/or bonus income received for a period of less than two years is acceptable where the underwriter determines that there are reasonable expectations of its continuance. An earning trend over the period of time of receipt must be established and analyzed. Part-time income means income from jobs taken in addition to the normal regular employment to supplement the borrower’s income. The same rules apply for determining using it as a part of qualifying.

•Extended Absence From Workforce: In some cases, the borrower may have recently returned to the work force after an extended absence. The borrower’s income may be considered effective and stable, provided the borrower has been employed in the current job for 6 months or more and the borrower can document a 2 year work history prior to the absence from the work force.

•Rental Income: Rental income from relatives residing on the premises is acceptable, provided the rental income is shown on the borrower’s tax returns.

•Cash Saved at Home: Borrowers who meet the “cash borrower” profile (no traditional credit, no bank accounts, etc.), who have saved cash at home and are able to adequately demonstrate the ability to do so, are permitted to have this money included, with satisfactory explanation, as an acceptable source of funds to close a mortgage loan.

•Child care expenses are NO LONGER included as debt.

•Non Occupant Co-Borrowers: When there are two or more borrowers, but one or more will not occupy the property as a primary residence, the maximum mortgage is usually limited to 75% loan to value. However, maximum financing is available for borrowers related by blood or for unrelated individuals that can document evidence of family type or long-standing and substantial relationship not arising out of the loan transaction. Qualifying is determined by the underwriter.

•Assumable: All FHA loans are assumable.

•Electronic/Online Payroll: The industry as a whole recognizes that some employers use online payroll for pay stubs and W-2s. These types of documentation are acceptable.

•Rate Adjustments: There are no interest rate adjustment “penalties” for higher loan to values with FHA fixed rate loans. The rate, is the rate, is the rate.

•Secondary Financing: Secondary financing is not allowed with an FHA loan. The only acceptable second mortgage is with an approved HUD gifting agent, such as down payment assistance provided by a gov’t agency in the form of a “silent” second mortgage. Piggie Back seconds/HELOCS are simply not allowed.

•Home Inspection: A home inspection may or may not be required on a property, depending on various factors. Typically, you will find it is not required, but is recommended on any existing residence.

•Pest Inspection: A termite inspection is required for all existing properties.

•Closing Costs: Closing costs charged to the borrower are restricted and may, in fact, be less than conventional closing costs (dependent upon your lender or broker).



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