Articles Tagged With: Credit History

Can I buy a manufactured home with an FHA loan?

June 4, 2015

FHA Loan Credit Score Requirements: A Commonly Asked Question

One common theme we find when fielding some questions about FHA home loans involves FICO score requirements. It’s true that FHA mortgage loan FICO score minimums are often lower than the requirements of some participating FHA lenders, but some borrowers get confused about FHA loan FICO score requirements in general–never mind what minimum number the FHA might accept versus what the lender might accept. One variation on a commonly asked FHA loan question goes something like this: “Does your actual FICO score matter as much as the details of your credit report? It sounds like the number on your FICO score isn’t that crucial compared to your credit history in the last 12 months leading up to the loan.” The idea that your FICO score itself “doesn’t count” as much | more...

May 1, 2015

FHA Loans For First-Time Home Buyers

By Joe Wallace

A reader asks, “I have a condo that was FHA approved when I bought it 10 years ago, they decide to not continue to participate any more about 5 years ago, all I was able to do was refinance at a lower rate thru streamlining with no money out. I had filed bankruptcy a little over 2 years before I bought it with a FHA loan at 5.5.” “I got my credit score up and have a rate under 4% now by refinancing it thru streamline which the balance can be assumed by someone if they qualify but would have to find the balance else where, what I want to know is that I want to sell my condo and buy a house possibly thru FHA can I buy it | more...

December 9, 2014

FHA Loan Credit Issues: A Reader Question On Disputed Accounts

By Joe Wallace

A reader asks, “I would like to know how to get an FHA loan, I had a Bankruptcy discharged in Aug. 2010. This is my problem I got a credit card to improve my credit score. I was paying faithfully, then another card company that I already had Two that company. I was paying faithfully on those accounts also.” “Well when the credit company took over that account I didn’t realize I now had 3 accounts with that bank. Another reason I didn’t know was, I moved and one statement was going to the old address. When the two statements came . So I would go onto the computer and pay my 2 accounts..My problem is on my credit report shows 30,60,30,60, 90 days late. What can I do to | more...

November 5, 2014

FHA Loans and Social Security Numbers: A Reader Question

By Joe Wallace

A reader asks, “I live in a community state property. My husband does not have a social security number to run his credit. How can I proceed with a FHA loan without being able to run a credit report on my husband?” FHA loan rules are very specific when it comes to the identity and documentation requirements for all parties to be obligated on an FHA home loan. According to HUD 4155.1 Chapter One, Section B, the following applies: “All borrowers, including United States (U.S.) citizens, must have a valid Social Security Number (SSN) and must provide evidence of that SSN to the lender. The lender is responsible for • documenting an SSN for each borrower, coborrower, or cosigner on the mortgage • validating each SSN either through − entering | more...

October 2, 2014

FHA Loan Credit Report Requirements

By Joe Wallace

When you apply for a home loan, it helps to know what the lender is looking for from your credit report. When it comes to FHA mortgages, the lender wants to see 12 months of on-time payments on your financial obligations as well as the actual numbers of your credit scores as reported by the three major credit reporting agencies. But what does the FHA require from those credit reports? What does the lender need in order to properly document you as a good credit risk? The FHA loan rules for credit report delivery and content are found in HUD 4155.1 Chapter One Section C. A quick glance at this section reveals that credit reports cannot be delivered to the lender from third-parties including the borrower. The credit reporting agency | more...

May 16, 2014

FHA Announces New Credit Access Measures For “Under Served Borrowers”

By Joe Wallace

The FHA has announced a new program to help under served borrowers get better access to credit to buy a home. According to the FHA press release HUDNo14-048, and the Blueprint for Access pamphlet, a new program will help with credit counseling and savings on their mortgages as a result of attending that counseling. “Today, the Federal Housing Administration (FHA) issued its ‘Blueprint for Access’ outlining the additional steps the agency is taking to expand access to credit for underserved borrowers. These steps include encouraging a broader use of housing counseling. This week, HUD will publish a notice in the Federal Register for the Homeowners Armed with Knowledge (HAWK) pilot program to further incorporate housing counseling into the home buying process for borrowers using FHA insured financing.” The press release | more...

May 5, 2014

FHA Loan Reader Questions: Credit Score Minimums

By Joe Wallace

A reader asks, “If a lender can want a higher credit score then FHA does, how do I find a lender that will work with me having a lower credit score? Mostly because if the lender is approved by FHA but don’t have to go by their guidelines doesn’t that make it that much more difficult for a low credit score individual to get a loan?” This question raises an important issue all FHA loan applicants should be aware of–FHA credit score minimums are just that. They are minimum requirements that lenders use as a benchmark, but the lender is free to require a higher credit score as long as that requirement is applied fairly and in accordance with federal Fair Housing Act laws. Let’s look at the FHA loan | more...

March 19, 2014

FHA Loans and Borrower Credit

By Joe Wallace

Some borrowers get nervous when applying for an FHA mortgage loan because of the credit check. There can be many reasons for this–some come to the house buying process with some history of credit problems, others may have disputes with creditors or other problems. Having credit issues in the past is not necessarily a barrier to an FHA loan in the present. But there are FHA guidelines for the lender you should be aware of that can help you better prepare for an FHA loan. The rules for FHA home loans found in HUD 4155.1 include instructions to the lender for analyzing borrower credit. Chapter Four of HUD 4155.1 has a section titled, “Past Credit Performance” and includes the following: “Past credit performance is the most useful guide to • | more...

January 8, 2014

FHA Loan Rules For Non-Traditional Credit

By Joe Wallace

One common type of question about FHA home loan applications involves how the lender process credit information. When a borrower wants to apply for an FHA loan and has plenty of “traditional credit”, there’s no problem developing and processing the loan application. But what about borrowers who come to the FHA loan process with little or no credit history or only what’s termed “non-traditional credit”? Some borrowers don’t want or use credit cards, which makes establishing a typical credit history more difficult. That may lead some to believe that a lack of credit card can hurt your chances for FHA loan approval. But that’s not necessarily true. The FHA has rules and instructions for the lender in cases where the borrower has non-traditional credit. We find those rules and guidelines | more...

December 20, 2013

FHA Loans and Commission Income: A Reader Question

By Joe Wallace

A reader asks, “Is it true that if you work in a job where your pay is based on commission you have to be with your current employer for at least one year to obtain a FHA loan, even if your prior job was in the same line of work and was also a commission paying job?” FHA loan rules require the lender to verify employment and income. Only verifiable income can be used to calculate a borrower’s ability to afford an FHA home loan and there are FHA regulations that determine what constitutes verifiable income. Commission income can be used if it meets certain criteria. The rules governing commission income are found in HUD 4155.1, Chapter Four Section D under a heading titled, “Salary, Wage, and Other Forms of | more...