Articles Tagged With: FHA FICO Requirements

December 20, 2013

FHA Loans and Commission Income: A Reader Question

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...

December 19, 2013

FHA Loan Questions: Credit History–What Counts?

By Joe Wallace

We get a number of reader questions about FHA home loans, and many of those include questions about credit history. Does the presence of a few late payments on a borrower’s credit history jeopardize an FHA loan application? In general, it’s best to come to the FHA loan process with at least 12 months of on-time payments on your record, but we should examine the FHA loan rulebook (HUD 4155.1) to see what instructions are given to participating FHA lenders about credit history. These instructions can be found in Chapter Four, Section C of HUD 4155.1. They include the following, found under the heading “Documenting an Analysis of Delinquent Accounts”: “The lender must document the analysis of delinquent accounts, including whether late payments were based on • a disregard for | more...

December 17, 2013

FHA Loan Reader Questions: Late Payments on Credit History

By Joe Wallace

A reader asks, “My wife and I have already completed home inspection,down payment and now must apply for FHA. We have already been officially told we qualify by score and income. I would like to know when mortgage companies look back at credit history and notice at least 3 creditor with late payments on them but I have the backing that I was in combat and wounded and not able at the time to pay it on time. I am 100% Disabled with VA award letters, can the company allow this as an acceptable excuse for not paying on time?” FHA loan rules on credit history are found in HUD 4155.1, Chapter Four Section C, which says: “Past credit performance is the most useful guide to • determining a borrower’s | more...

December 6, 2013

FHA Loans, Missed Mortgage Payments, and Refinancing Loans: A Reader Question

By Joe Wallace

A reader asks, “I inquired about a refi with [a lender], I have a bankruptcy on my credit report but I have been out of it for three years. I was told that I had two late payment on my report thru my credit union.” “I informed the person that I spoke that my payment to my credit union was automatic payment and that those were no fault of my own. He explained to me that I would have to contact my cu and they would have to call the reporting bureau, he also stated that until that was remove I would not qualify for a loan. Is this true?” This reader question raises a very good point about FHA mortgages all borrowers should keep in mind. Not all lender | more...