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Quick Q and A on FHA, Credit, Down Payment, Bankruptcy, Short Sale, Foreclosures and More


This is the most current info and changes often:

Is there an advantage to doing a short sale vs. a foreclosure?

Yes. With a short sale some lenders allow a person to buy again after 24 months, but on a foreclosure it’s generally 36 months.

How long does a borrower have to wait to purchase a home after a BK?

On FHA and VA: Chapter 13 = 1 year from filing date as long as payment history is satisfactory.  Chapter 7 = 24 months after discharge date.  Conventional = Generally 4 years

Can a borrower with no credit score or “thin” credit get a home loan?

Yes, using alternative credit, such as utility bills, cell phone bills, cable TV bills, or rental history.

Chain of Title: Are bank-owned properties an exception to the 90 day chain of title rule on FHA loans?

Yes, www.fha.gov # 4155 will cover this topic.

FHA 203k fixer upper loans: What items can NOT be repaired under the 203k program?

Structural and Pool.  What is the maximum repair amount? $35,000.

How many financed properties can an individual borrower own?

Fannie Mae allows up to 10.

If there is pending litigation on a specific condo complex, can a borrower still get a loan?

It depends.  If it’s a structural issue, then generally not.  If other issues, then possibly.

Can a borrower get a loan on "manufactured home” or “double wide”?

Yes, as long as it was converted to “real property” and manufactured after 1976.

What are the minimum down payments in today’s market?

HUD homes: $100 down, VA: $0 down, FHA 3.5% down; second home and investment properties: 10% down

What is the minimum credit score nowadays?

600 middle score.

What’s the deal with the $8000 tax credit for first-time buyers, and what is a "first-time buyer?”

In short, what this new announcement seems to indicate, is the $8000 tax credit can NOT be used for the minimum 3.5% FHA down payment, BUT it can be used for: additional down payment, interest rate buy down, or closing costs, which will help buyers qualify for a more expensive home OR it will help borderline buyers qualify for something, rather than nothing at all. This tax credit expires on December 1, 2009 http://www.hud.gov/news/release.cfm?content=pr09-072.cfm. The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

How do I find out if a specific condo project is Fannie or FHA approved?



By Dan Sherbondy of Direct Access Lending

An ACRES Real Estate Services, Inc. Company