Home Buyers Find It Easier to Obtain FHA Loans
In a policy switch that could be important to thousands of applicants seeking home mortgages with low down payments, the Federal Housing Administration has rescinded tough new credit restrictions that were scheduled to take place the beginning of this month. Borrowers who would have been affected are the ones who have one or more collections or disputed bill accounts on their national credit bureau files, where the aggregate amounts were $1,000 or greater. Industry experts estimate that if the newly rescinded rules had gone into effect, as many as one in three FHA loan applicants would have had difficulty being approved.
Meanwhile, if you plan to apply for an FHA loan and you think you have collections, or disputes on file, here is the good news: you will NOT be forced to pay off remaining balance, though you will have your applications referred for “manual” underwriting, meaning a loan officer looks at the hard facts and circumstances of your disputed financial accounts. Of course, this will slow down your approval and still does not guarantee anything.
Yet, it is a step in the right direction to continue the housing recovery in San Diego…. home buyers looking to purchase a home while the interest rates are low and need that extra help with their lower credit scores, a disputed credit issue, or having a lower down payment.