Get FHA Loan After Doing a Short Sale On Your Current Home is a post from: FHA,VA and Conventional Home Loans in all 50 States

The Department of Housing and Urban Development which puts out the guidelines for borrowers to qualify for a FHA loan has just released some new rules for borrowers selling their current house as a short sale and then getting a new FHA loan to purchase a new house.

Basically the main points of the new FHA short sale guidelines are if a borrower has been current on their mortgage and other installment debts (such as auto loans, student loans, etc…) for the last 12 months prior to the short sale, they may be eligible for a new FHA loan immediately on a new primary residence they want to buy after their current house is sold on a short sale. 

However is a borrower has been in default on their mortgage or other installment debts in the 12 months leading up to the short sale, they will have to wait three years from the date the short sale closes before they will be eligible for a new FHA loan.

So if you are thinking of doing a short sale on your current primary residence and you want to buy a house again without waiting three years, the key point is you can’t have any late payments on your mortgage or other loans for 12 months leading up to the short sale.   Of course the challenging aspect here is that many lien holders will not consider doing a short sale for borrowers unless they are in default.  But if you want to buy another home in the next three years and get a mortgage on it, you may want to speak to your lender and see if they will consider a short sale even if you are not late on the mortgage.

Of course these rules are the guidelines that came out of the Dept of Housing and Urban Development.  The lenders that actually fund the FHA loans can create their own “overlays” to these guidelines.  So it is ultimately up to how the lenders will interpret these new rules.

Here are some general highlights of FHA loans:

• Only 3.5% required for FHA loan down payment (vs. 10% down in most cases on conventional loans in California)
• Maximum FHA loan up to $729,750 in many counties of California and other expensive states
• FHA loan interest rates at historic lows (the U.S. Government is currently buying Mortgage backed securities at an unprecedented rate artificially holding down interest rates…this will not last that much longer)
• Seller can credit up to 6% of the purchase price for FHA loan closing costs
• FHA streamline refinance to lower rate options available once you have an FHA loan

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA Loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

858-922-7899

How Your Income and Employment is Evaluated When You Apply for a FHA Loan is a post from: FHA,VA and Conventional Home Loans in all 50 States

 This post is a review of how your income and current employment will be evaluated in the FHA loan approval process. 

Latest two years of employment verified 

FHA likes to see two years of stable employment.  There are many exceptions however for gaps in employment.  For example, if you are just graduating from college or professional training, you do not need two years of employment as long as you can document that you were in school previously and you are now employed in your profession of study.   And there are many, many exceptions.  Please inquire about your situation.

 Overtime and bonus income

To count this you must have received this income for 24 months and we will average this income over the last 24 months.  There must be evidence it will continue.

Part-time employment 

Must have a two year history

Commission income

You must have a two year history and we will average this income over the last 24 months.  Your last two years federal tax returns all pages are required to calculate this income.

Unreimbursed business expenses (2106)

These expenses will be subtracted from you qualifying income.

Alimony and child support income

You can count this income towards qualification if it will continue for three or more years and you will need to provide the divorce decree and 12 months evidence of receipt of funds.  This income can be multiplied by 1.25 since it is not taxed.

Government assistance

This can be counted as income if you can document it will continue for three more years.

Self-employed or 1099 independent contractors

You will need to supply you last two years tax returns all pages and schedules and your NET business income will be what is used as you qualifying income.   There are a lot of details regarding self-employed income, please call or email me with questions.

So that is a brief review of some items that will be needed and how your income and job history will be evaluated when applying for a FHA loan. 

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions about your employment history or income, or any other questions at all about getting approved for a FHA Loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

858-922-7899

homeloan8@gmail.com