FHA Loan With Timeshare Foreclosure Mortgage Guidelines

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Can I get an FHA loan with timeshare foreclosure is one of the questions we get asked a lot. Why am I reading Gustan Cho Associates can do an FHA loan with timeshare foreclosure when other lenders say I have to waiting 3 years. Are there waiting period requirements to qualify for an FHA loan with timeshare foreclosure? There are mandatory waiting periods after bankruptcy, foreclosure, deed in lieu of foreclosure, and short sale to qualify for a home loan. Every mortgage loan program, whether it is FHA, VA, USDA Loans, and Conventional Loans has a mandatory waiting period after a housing event. What are housing events?  Housing events are the following:

  • foreclosure
  • deed in lieu of foreclosure
  • short sale

There are a mandatory waiting period after a bankruptcy as well for borrowers to qualify for government and conventional loan programs. In this article, we will cover and discuss FHA Loan With Timeshare Foreclosure Mortgage Guidelines.

FHA Waiting Period Requirements After Foreclosure

Under HUD Guidelines, HUD is the parent of the Federal Housing Administration or FHA, there is a three-year mandatory waiting period to qualify for an FHA Loan after a housing event. There are three different types of housing events: Foreclosure, deed in lieu of foreclosure, and short sale. Foreclosure and deed in lieu of foreclosure start date is the recorded date of a foreclosure, and/or deed in lieu of foreclosure to qualify for an FHA Loan. The three-year waiting period clock does not begin when a homeowner turns in their keys to their lender. The waiting period after a short sale starts from the date of the short sale reflected on the Closing Discloure. 

When Does The Waiting Period Start After Foreclosure FHA

The three-year waiting period time clock starts from the date of the sheriff’s sale and/or when the deed to the property has been transferred out of the name of the homeowner. HUD Guidelines require a three-year mandatory waiting period for borrowers to qualify for an FHA Loan after a short sale. The three-year waiting period start date begins from the date of the short sale that was reflected on the HUD Settlement Statement of the short sale property. Gustan Cho Associates has non-QM mortgages one day out of bankruptcy and/or foreclosure with a 30% down payment on a home purchase.

FHA Waiting Period After Bankruptcy

FHA Guidelines After Bankruptcy require a mandatory two-year waiting period for an FHA Borrower to qualify for an FHA Loan after a Chapter 7 Bankruptcy discharge date. Home Buyers who are currently in a Chapter 13 Bankruptcy can qualify for FHA Loans one year into their Chapter 13 Bankruptcy repayment plan. Need Chapter 13 Bankruptcy Trustee approval. Lenders will want to see proof that the borrower has made at least 12 timely payments to his or her creditors with no late payments. Late payments after bankruptcy and/or a housing event are frowned upon by lenders.

FHA Loans With Late Payments

Many lenders will not approve mortgage loan applicant’s who have late payments after bankruptcy and/or foreclosure. This holds true even though borrowers get an approve/eligible per automated underwriting system. Most lenders just do not want any mortgage loan applicants with late payments after bankruptcy and/or foreclosure. Lenders classify mortgage loan applicants with late payments after bankruptcy and/or foreclosure as second offenders and financially irresponsible. One or two late payments after bankruptcy and/or foreclosure are not always a deal killer. The team at Capital Lending Network, Inc. has helped countless borrowers get mortgage loan approvals with late payments after bankruptcy and/or foreclosure. However, the borrower will need to get an approve/eligible per AUS.

HUD Guidelines On Timeshare

HUD Guidelines On Timeshare

Many consumers purchased timeshares in the 2000s when the real estate market was hot. After the 2008 Real Estate And Mortgage Meltdown bankruptcies and foreclosures have soared to historic highs. Among foreclosures were consumers who purchased timeshares. Timeshare owners could no longer liquidate their timeshares and had to go through timeshare foreclosures. I get many calls from home buyers who were told by banks and mortgage lenders that they do not qualify for an FHA loan because they have a timeshare foreclosure. Timeshare owners were told that there is a mandatory waiting period after timeshare foreclosure to qualify for an FHA Loan. This is not true.

Why Are Homebuyers Getting Denied For an FHA Loans After Timeshare Foreclosure?

Unfortunately, these loan officers are telling home buyers that there is a waiting period after timeshare foreclosure to qualify for an FHA Loan. These loan officers do not know what they are talking about. There is no waiting period to qualify for an FHA Loan with a prior timeshare foreclosure. Timeshares are not considered real estate loans. Timeshare loans are considered consumer installment loans under HUD FHA Guidelines. We will be discussing qualifying for FHA Loan With Timeshare Foreclosure on this blog.

What Are Timeshares?

Timeshares are rights to a property such as a condo, townhome, or home where it is owned by a group of real estate investors. Under HUD Guidelines, timeshares are not real estate. Timeshare loans are considered loans and not real estate mortgages. Therefore, there is no waiting period after timeshare foreclosure. Timeshares allow those who purchase timeshares to occupy and enjoy the property for a certain period of time during the year. During the time when the timeshare owners have their time there, they can enjoy it like their vacation homes for themselves and their families. The bottom line, a timeshare property is a vacation home.

Is It Best To Have a Timeshare or Own a Second Home

FHA Loan With Timeshare Foreclosure Mortgage Guidelines After Defaulting on Timeshare

Timeshare properties are like any condos, townhomes, or homes. Timeshares properties are normally in resort areas such as lakefront properties, ski resorts, or golf course settings. If a timeshare property owner defaults on their timeshare property, timeshares are foreclosed just like regular homes. A timeshare unit owners default on their timeshare property when they fail in making their monthly mortgage payments and housing expenses such as homeowners associations dues.

Timeshare Property Foreclosure Process

If a timeshare unit owner defaults on their payments, the timeshare property management company, as well as the timeshare lender, can initiate foreclosure proceedings when a timeshare property owner defaults on their timeshare loan and homeowners association dues. The foreclosure process is similar to a regular home foreclosure process where the foreclosure gets filed in the county court system where the timeshare property is located. However, under HUD Guidelines, a timeshare loan is not a real estate mortgage but rather an installment loan. Due to HUD Guidelines On Timeshare Foreclosure, there is no waiting period after timeshare foreclosure to qualify for FHA Loans.

Is Timeshare Considered a Mortgage?

As mentioned earlier, many mortgage lenders will tell prospective borrowers that they need to wait three years after a timeshare property foreclosure to qualify for an FHA Loan. If these loan officers would do a little bit of due diligence and check HUD 4000.1 FHA Handbook they will realize that under HUD’s FHA Guidelines, timeshare foreclosures are treated as consumer installment loans and not mortgage loans. FHA Foreclosure waiting period guidelines do not apply to timeshare foreclosures.

Mortgage Lenders Experts on FHA Loan With Timeshare Foreclosure With No Overlays

Any borrowers with a prior timeshare foreclosure do not have to abide by the mandatory waiting period after foreclosure guidelines under FHA. Homebuyers told they do not qualify for an FHA loan due to a prior timeshare foreclosure, please contact us at Gustan Cho Associates Mortgage Group at 262-716-8151 or text us for a faster response. Or email us at [email protected] Our team at Gustan Cho Associates Mortgage Group is available 7 days a week, on evenings, and weekends to take your phone calls and answer any questions you may have.

This article on qualifying for an FHA loan with timeshare foreclosure was updated and published on July 4th, 2022