Bad Credit Mortgage Loans Kansas With No Lender Overlays

This BLOG On Bad Credit Mortgage Loans Kansas With No Lender Overlays Was UPDATED On November 18th, 2018

What Does Bad Credit Kansas Mortgages Without Lender Overlays

Kansas is one of the hardest hit state by the Great Recession and Housing Collapse of 2008.

  • Homebuyers who have credit scores between 500 and 580 FICO credit scores can still qualify for a mortgage loan
  • Never in the state of Kansas has housing market collapsed like it did back in 2008
  • Many Kansas homeowners had mortgage loans with teaser rates
  • Many homeowners had adjustable-rate mortgages which skyrocketed to double and triple after the teaser rate period was over
  • Fortunately, the economy in Kansas has recovered and so did the housing market
  • Many homeowners who went bankrupt or went through a housing event such as a foreclosure and/or short sale have recovered
  • They are now ready to purchase a housing

In this article, we will cover and discuss qualifying for a mortgage with bad credit and lower credit scores.

Lender Overlays On Government And Conforming Loans

The Gustan Cho Team at Loan Cabin Inc. is a direct lender with no lender overlays on government and conventional loans.

  • Kansas Borrowers with credit scores between 500 and 580 can now qualify for Kansas FHA Loans
  • The minimum down payment required is 10% versus the normal 3.5% down payment required for the traditional borrowers with credit scores between 500 and 579  
  • To qualify for FHA Loans with 3.5% down payment in the state of Kansas, home buyers need at least a 580 credit score
  • There are other criteria that will be taken into consideration prior for a mortgage lender to approve a borrower with FICO scores under 580
  • The Gustan Cho Team at Loan Cabin Inc. will only go off Automated Underwriting System Findings and has no lender overlays

Gustan Cho Associates are experts in Bad Credit Mortgage Loans with no lender overlays. Mortgage Overlays are additional lending requirements that are above and beyond those of the minimum mortgage guidelines per loan program.

FHA Bad Credit Mortgage Loans Kansas With Low Credit Scores

What does FHA Kansas Mortgage Bad Credit Loans Mean?

We help countless of mortgage borrowers get qualified for Bad Credit Mortgage Loans. The most popular Bad Credit Mortgage Loans are FHA Loans. Mortgage lenders who specialize in bad credit mortgage loans Kansas like to see no late payments in the past 12 months.

  • They also do not like to see late payments after a bankruptcy and/or foreclosure
  • Many lenders who do originate and fund Bad Credit Mortgage Loans Kansas will automatically disqualify borrowers with late payments after bankruptcy and/or foreclosure
  • Gustan Cho Associates will only go off AUS FINDINGS and late payments after bankruptcy, foreclosure, deed in lieu of foreclosure, a short sale is not a deal killer
  • Other factors they frown upon are overdrafts in the past 12 months
  • At Gustan Cho Associates, overdrafts are fine with a good letter of explanation
  • Mortgage lenders also want to see three established credit tradelines that is at least one year old

In the event if the borrower does not have three credit tradelines, some lenders who specialize in bad credit mortgage loans Kansas will take non-traditional tradelines such as the following:

  • utility payment history
  • rental verification
  • cell phone payment history

Credit Tradelines is not an FHA Guideline Requirement:

  • We do not require any credit tradeline requirements as long as the applicant gets an approve/eligible per Automated Underwriting System

Verification Of Rent May Be Required Bad Credit Mortgages

Lenders who specialize in bad credit mortgage loans want to see one-year verification of rent as part of their lender overlays. Many instances with lower credit score borrowers or borrowers with higher debt to income ratios, the Automated Underwriting System Findings may require verification of rent.

Verification Of Rent is only valid by providing 12 months of on-time canceled checks and/or 12 months of bank statements if the landlord is not a property management company.

  • If the renter is renting from a registered property management company, then a verification of rent form, also known as a VOR, provided by the lender needs to be completed and signed/dated by the property management manager
  • VOR by property manager can be used in lieu of canceled checks and/or bank statements
  • A letter from a licensed property management company could be used as proof of rental verification
  • Renters who are renting an apartment or home from an individual, canceled checks will be required as proof of rental verification
  • In the event renters do not have rental verification because monthly housing expenses are paid with cash or live with family, borrowers can still get a mortgage approval
  • But the debt to income ratio requirements might be stricter

Lenders Specializing In VA And FHA Bad Credit Mortgages

Who are the lenders specializing in VA and FHA Bad mortgages

Banks normally do not deal with bad credit mortgage loans Kansas.

  • Most banks and credit unions will most likely have overlays
  • For example, most banks require a 620 to 640 credit scores on VA Loans Kansas and FHA Loans Kansas even though HUD Guidelines require 580 credit scores for FHA Loans 
  • There are no minimum credit score requirements and/or debt to income ratio requirements on VA Loans
  • Gustan Cho Associates approves VA Loans and FHA Loans with under 600 credit scores and has no overlays

If mortgage borrowers credit scores are under 620 they should consult with a mortgage company that specializes in bad credit mortgage loans Kansas.

Qualifying For FHA Loans With Bad Credit Kansas

Here are the requirements to qualify for FHA Loans With Bad Credit in Kansas:

  • 580 credit scores for 3.5% down payment
  • Outstanding collections and charge off accounts do not have to be paid off
  • Maximum debt to income ratio capped at 46.9% front end and 56.9% back end for borrowers with at least a 620 credit score to get an approve/eligible per Automated Underwriting System
  • Under 620 credit scores, DTI is capped at 43% to get approve eligible
  • Loan Officer will  complete a 1003 mortgage application and will run a credit check
  • Borrowers who have scores close to a 580 FICO credit score, the loan officer may help borrowers boost credit scores to qualify for a 3.5% down payment Kansas FHA loan versus having to put down a 10% down payment for under 580 credit scores

Please contact Gustan Cho Associates at 262-716-8151 or text for a faster response. Or email us at [email protected]  Our viewers can also subscribe to our daily mortgage and real estate newsletter at

Related> Bad Credit Mortgage Loans: FHA Loans To The Rescue

Related> Home Loan With Bad Credit

Related> Bad Credit Home Loans

Leave a comment