FHA Chapter 13 Guidelines During The COVID-19 Pandemic Crisis

BREAKING NEWS: FHA Chapter 13 Guidelines During The COVID-19 Pandemic Crisis

FHA Chapter 13 Guidelines
Gustan Cho Associates

The U.S. economy was booming prior to the coronavirus pandemic.

  • The 2020 housing market forecast was expected to have been the strongest in history
  • Home prices were rising year after year
  • Both HUD and the Federal Housing Finance Agency (FHFA) have been increasing FHA and Conventional Loan Limits for the past four years due to rising home prices
  • 2020 FHA loan limits is now capped at $336,760
  • 2020 Conforming loan limits is now capped at $510,600
  • The housing market was booming for many years with no signs of correction
  • There were more buyers versus inventory of homes
  • To help with the booming market was a booming mortgage markets
  • The 2020 housing forecast for 2020 was supposed to be the best ever in the history of the United States
  • Then the coronavirus pandemic hit our Nation

The whole U.S. economy closed. Luckily, many state governors are now reopening their states in phases. The key question is the long term negative impact on the U.S. economy from the global pandemic.

The Shut Down Of The U.S. Economy Due To The COVID-19 Pandemic

The coronavirus pandemic shut the whole U.S. economy down in a matter of weeks:

  • Millions of businesses closed until further notice
  • Many businesses is not expected to reopen
  • Millions of Americans have lost their jobs
  • Over 33 million Americans have filed unemployment claims in the past seven weeks
  • Unemployment rates is expected to top 20% in the coming weeks and months
  • Gustan Cho Associates still originate and fund FHA loans during and after Chapter 13 bankruptcy
  • GCA Mortgage Group has not suspended manual underwriting on FHA and VA loans during the COVID-19 pandemic mortgage crisis

In this ARTICLE, we will discuss and cover the FHA Chapter 13 Guidelines During The COVID-19 Pandemic Crisis.

FHA Chapter 13 Guidelines During The COVID-19 Pandemic Versus Lender Overlays

What are the FHA guidelines of Chapter 13 when applying COVID-19 to a pandemic versus the lender's overlays

The team at Gustan Cho Associates have been getting countless calls from borrowers to see why other lenders have halted taking loan applications for borrowers in Chapter 13 repayment plan.

  • Unfortunately, most lenders have halted manual underwriting on FHA and VA loans during the coronavirus pandemic
  • Many lenders have imposed lender overlays on credit scores, manual underwriting, FHA 203k loans, and debt to income ratios
  • The great news is Gustan Cho Associates have not added any overlays on FHA, VA, USDA, Conventional loans during the COVID-19 pandemic crisis
  • Many lenders have stopped doing manual underwriting until further notice
  • Most lenders have also increased credit score requirements on FHA loans to 660 FICO
  • Other lenders have stopped taking applications on FHA 203k loans, Reverse Mortgages, Jumbo Mortgages, high balance government loans, and other mortgage programs
  • GCA Mortgage Group are busy taking loan applications on borrowers who cannot qualify at other lenders due to lender overlays
  • FHA Chapter 13 Guidelines During The COVID-19 Pandemic has not changed

The changes borrowers are told are not HUD Guideline Changes but rather changes in particular lender overlays.

FHA Chapter 13 Guidelines During Repayment Plan

To qualify for a 3.5% down payment FHA mortgage, borrowers need a 580 credit score.

  • Borrowers can qualify for an FHA loan with under 580 credit score and down to a 500 FICO
  • However, any borrowers with under 580 credit scores, they would need to put down a 10% down payment
  • Gustan Cho Associates are one of a very few national lenders that still honor FHA loans with under 620 credit scores during the coronavirus pandemic
  • We also accept manual underwriting during the coronavirus pandemic on FHA and VA Loans
  • Borrowers can qualify for FHA loans during Chapter 13 Bankruptcy repayment plan after one year into the plan
  • Timely payments to the bankruptcy trustee is required
  • Trustee approval is required
  • Most trustee will approve a home mortgage for home buyers during Chapter 13 Bankruptcy repayment plan
  • It needs to be manual underwriting
  • There is no waiting period after Chapter 13 bankruptcy discharged date
  • Any borrowers who has not a bankruptcy discharged for at least two years, the file needs to be manually underwritten

GCA Mortgage Group are experts in manual underwriting.

Qualifying For FHA And VA Manual Underwriting During The COVID-19 Pandemic

How to qualify for manual underwriting of FHA and VA emissions during the COVID-19 pandemic

The mortgage process can be stressful under the best of times. However, many homebuyers have been through the ringer qualifying for a mortgage during the COVID-19 pandemic. The great news is Gustan Cho Associates Mortgage Group is a five-star national lender with no lender overlays during the coronavirus pandemic. If you need to qualify for a mortgage during the COVID-19 pandemic with a lender with no overlays, give us a call at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] The team at GCA Mortgage Group is available 7 days a week, evenings, weekends, and holidays.

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