FHA Loans Louisiana

FHA Loans Louisiana For Bad Credit With 500 FICO Borrowers

Gustan Cho Associates are mortgage brokers licensed in 48 states

We will be covering qualifying and getting approved for FHA loans Louisiana for borrowers with less than perfect credit. Louisiana is a beautiful coastal state with many attractions and places to visit. There are hundreds of thousands of visitors and tourists visiting the state of Louisiana every year. A large percentage of them fall in love with the state. The climate, entertainment, and still low housing prices make the state of Louisiana one of the fastest-growing states in the continental United States.

Buying a Home In Louisiana With Bad Credit

Many people in Florida have been priced out of the housing market due to the explosive surge in home prices. The state of Florida housing market, one of the hardest-hit states of the Great Real Estate Collapse, has seen home values skyrocket from a median of $167,000 back in 2010 to $396,500 in late 2021. Florida’s housing market is stronger than ever due to the strong economy, and tens of thousands of new people and businesses moving to the state.  Louisiana is no different. Since many homebuyers in Florida have been priced out of the housing market, Louisiana is the state of choice. Homebuyers in Louisiana can qualify for an FHA loan with bad credit. FHA loans are very forgiving for borrowers with prior bad credit who want to see timely payments in the past 12 months.

FHA Loans Louisiana With No Credit Scores

Many homebuyers with no credit tradelines have no credit scores. You can qualify for an FHA loan with no credit scores using nontraditional credit tradelines in Louisiana. Nontraditional credit are creditors who do not report on the credit bureaus. Examples of nontraditional credit is utilities, medical insurance, cell phone carriers, cable companies, internet companies, educational institutions, and other creditor who has an installment agreement with you but does not report on the three credit bureaus. Many Americans choose to relocate to Louisiana due to the low cost of living, low taxes, and affordable home prices. You can buy a home in Louisiana with bad credit. FHA loans are the most popular mortgage program for homebuyers with bad credit. You can qualify for an FHA loan with a 580 credit score and a 3.5% down payment. In the following paragraphs, we will cover and discuss qualifying for FHA loans Louisiana with bad credit and credit scores down to 500 FICO.

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Can I Get Approved For an FHA Loan in Lousiana With Bad Credit in a Booming Housing Market?

Home prices in Texas are averaging $389,500 as of December 2021. Arizona, Georgia, Alabama, Kansas, Oklahoma, New Mexico, Nevada, Pennsylvania, Oregon, New Jersey, Oklahoma, New Mexico, Alabama, Oregon, Wyoming, and the Carolinas are seeing double-digit home price increases with no signs of slowdown despite the all-time mortgage rates since 2008. Is Louisiana next? Louisiana has not seen explosive growth in home prices until the second half of 2020. Many real estate industry experts predict that home values throughout the state of Louisiana will not just remain strong, but demand will exceed supply forcing home prices to rise. Homebuyers with bad credit had reservations about applying for an FHA loan application in Louisiana because they thought you needed perfect credit and a 20% down payment. Homebuyers in Louisiana do not have to get priced out of the housing market. Homebuyers can qualify for FHA loans Louisiana with bad credit, prior bankruptcy and/or foreclosure, collections, charged-off accounts, late payments, and a high debt-to-income ratio.

Bad Credit Home Loans in Louisiana For First-Time Homebuyers

Many people from high-taxed states with outrageous home prices are eyeing Lousiana to make their homes. They are thinking of moving to Louisiana, buying a home, and starting a new life with their family. Many people thinking about moving to Louisiana are first-time homebuyers with bad credit. Gustan Cho Associates can help first-time homebuyers with bad credit qualify for FHA loans Louisiana. Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify at other lenders. There are many reasons for people wanting to relocate to Louisiana. Louisiana was awarded its name from Louis XIV, the king of France from 1643 to 1715. The state is embedded with culture and diversity. Louisiana is ranked 31st in population. 25th in overall size in the United States. Most of the natural beauty in Louisiana is formed by the sedimentation washing down the Mississippi River. There are hundreds of naturally formed deltas and many swamps. These attract some amazing wildlife making Louisiana not just a great place for nature lovers to visit, but also to live!

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Can I Qualify For FHA Loans Louisiana With Collection Accounts?

In 2019, it is estimated Louisiana has over 4.6 million residents. New Orleans is the largest city and Baton Rouge is the capital. Since becoming a state in 1812, Louisiana has seen steady growth, year after year. From 2017 to 2018 there was a modest growth of .75%, ranking 27th in the country. Starting in late 2021, Louisiana has explosive growth of Americans moving from high-taxed states. One more unique fact about Louisiana is, that it is the only state who does not use counties, they have political subdivisions called “parishes”. Due to the coronavirus outbreak back in February 2020, millions of Americans had a financial impact that hurt their credit. Many would-be potential homebuyers suffered bad credit and have outstanding collection accounts. The good news is HUD does not require homebuyers to pay outstanding collection accounts. You can qualify for FHA loans Louisiana with unpaid collection accounts. Outstanding collections and charged-off Accounts do not have to be paid to qualify for FHA loans Louisiana.

2022 FHA Loan Limit For Louisiana

HUD and the FHFA have been increasing FHA and Conforming Loan Limits for the past six years. Louisiana is a great place to buy a home. Many Americans use an FHA loan to buy their primary homes. Two to four-unit homes have higher loan limits. The following are the 2022 FHA loan limits for Louisiana:

  • Single Family Unit    $420,680
  • Two Family Unit        $538,650
  • Three Family Unit    $651,050
  • Four Family Unit       $809,150

Homebuyers can purchase an owner-occupant primary two to four-unit home with a 3.5% down payment. You can live in one of the units and rent the remaining units. Many Louisianans have taken advantage of buying a multi-unit property and renting out the other units to add supplemental income.

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Can I Qualify For an FHA Loan in Louisiana With Charged-Off Accounts?

Why use an FHA loan? FHA loans are the most popular home loan program in the United States. HUD, the parent of FHA, promotes homeownership so first-time homebuyers can purchase their first homes with a 3.5% down payment. Homebuyers with less than perfect credit, lower credit scores, outstanding collections/charged-off accounts, and prior bankruptcies and/or housing events can qualify for FHA Loans at very low rates. You do not have to pay unpaid charged-off accounts to qualify for an FHA loan in Louisiana. Charged-off accounts can be ignored by mortgage underwriters.

The Best FHA Louisiana Lenders For Bad Credit With 500 FICO 

Lenders love to originate and fund FHA loans because of government guarantees. FHA is not a lender but rather an insurer. FHA will insure and guarantee lenders a loss in the event borrowers default on their FHA Loans. This is the reason why mortgage lenders can offer home buyers with lower credit scores and less than perfect credit such as a low down payment and low-interest home loans.

Do All Lenders In Lousiana Have The Same FHA Loan Requirements?

Not all FHA mortgage lenders have the same loan requirements on FHA loans. All lenders need to meet the minimum agency mortgage guidelines. However, lenders can have lender overlays. Lender overlays are mortgage guidelines imposed by the individual lender which is above and beyond the minimum HUD guidelines on FHA loans. Gustan Cho Associates Mortgage can approve borrowers for an FHA loan in Louisiana with a 500 credit score. However, most lenders will have lender overlays on credit scores of 620 or higher. What this means is that lender with overlays does not want any borrowers with a credit score of under 620 FICO.

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FHA Manual Underwriting Guidelines in Louisiana

FHA and VA loans are the only two loan programs that allow for manual underwriting. Not too many lenders allow manual underwriting due to their lender overlays.  Most lenders have lender overlays on FHA loans. What lender overlays are mortgage guidelines that are above and beyond minimum HUD Guidelines. For example, HUD requires a minimum credit score of 580. Many lenders may require a 620 to 640 credit score. This higher credit score requirement is called a lender overlay. Michael Gracz of Gustan Cho Associates has a national reputation for representing a national mortgage banker with zero FHA Lender Overlays. Gustan Cho Associates has no lender overlays on manual underwriting on FHA loans Louisiana.

FHA Down Payment Requirements in Louisiana

FHA Loans Louisiana has the most lenient mortgage guidelines for the down payment, bad credit, and low credit scores. The down payment requirement is a 3.5% down payment for homebuyers with at least a 580 credit score. For homebuyers with under 580 credit scores and down to 500 FICO, HUD requires a 10% down payment versus a 3.5% down payment with 580 FICO.

FHA Loans After Chapter 7 Bankruptcy in Louisiana

There are mandatory waiting period requirements after bankruptcy to qualify for FHA loans Louisiana. HUD, the parent of FHA, requires a 2-year waiting period after the Chapter 7 Bankruptcy discharge date. You should start re-establishing credit the minute you get your Chapter 7 discharge. No late payments after the discharge date.

FHA Loans During Chapter 13 Bankruptcy in Louisiana

Borrowers can qualify for FHA loans one year into a Chapter 13 Bankruptcy repayment plan in Louisiana. You need to have made at least 12 timely payments on your bankruptcy repayment plan. The trustee needs to sign off on the mortgage. Most bankruptcy trustees will sign off on a home purchase and/or refinance mortgage during Chapter 13 Bankruptcy repayment plan. The file needs to be a manual underwrite.

FHA Loans After Chapter 13 Bankruptcy in Louisiana

There is no waiting period requirements after Chapter 13 Bankruptcy discharged date to qualify for FHA loans Louisiana. If the Chapter 13 Bankruptcy has not been seasoned for at least two years, it needs to be a manual underwriting FHA loan process. The payment history for the past two years is required. No late payments in the past two years on manual underwriting.

There is no waiting period after Chapter 13 Bankruptcy to qualify for FHA Home Loans

FHA Loans After Foreclosure In Louisiana

FHA Loans After Foreclosure In Louisiana

There is a mandatory waiting period after a housing event to qualify for FHA loans Louisiana. There is a three-year waiting period after the recorded date of foreclosure.  The three year waiting period start date starts from the date the deed was transferred out of the homeowner’s name and/or the date of the sheriff’s sale. Timely payments since the foreclosure is required with no late payments.

FHA Loans After Deed in Lieu of Foreclosure in Louisiana

There is a three year waiting period after a deed in lieu of foreclosure to qualify for FHA loans Louisiana. The waiting period start date is the date when the title was transferred out of the borrower’s name into the new owner and/or lender. Re-established credit with no late payments since the deed in lieu of foreclosure is required.

FHA Loans After Short Sale in Louisiana

Homebuyers can qualify for FHA loans Louisiana after short sale. There is no waiting period requirements if the borrower was timely up to the date of the short sale and sold the home. However, most lenders require you to miss one payment prior to the final short sale date. One thirty day late payment prior to the short sale will require a waiting period requirement. There is a three year waiting period from the date of the short sale.

Mortgage Rates on FHA Loans Louisiana

Mortgage rates on FHA loans are based on the borrower’s credit scores. Mortgage rates on FHA loans are generally lower than conventional loans due to the government guarantee from HUD. However, borrowers with lower credit scores may get higher rates and sometime charged discount points. FHA loans Lousiana has the following features:

  • Low FIXED mortgage insurance
  • Lower interest rates compared to conventional financing
  • 3.5% down payment for borrowers with at least a 580 credit score
  • Scores under 580 credit scores with 10% down
  • FHA loan approval for bad credit and credit scores down to 500 FICO
  • Higher debt-to-income ratio thresholds

Get Approved Today For FHA Loans Louisiana 

How To Start The Pre-Approval Process With A Lousiana FHA Lender With No Overlays

Home Buyers who plan on becoming homeowners and need to qualify with a direct lender with no lender overlays, please reach out to Mike Gracz of Gustan Cho Associates Mortgage Group for more details. Mike Gracz is an expert in FHA mortgage lending!  Michael Gracz can be reached at (800) 900-8569 or text for a faster response. Or email Michael at gcho@gustancho.com. Gustan Cho Associates does not have any LENDER OVERLAYS. Please see the Lender Overlay Blog written by Gustan Cho.

Best Louisiana FHA Lenders For Bad Credit at Low Competitive Rates

Lender overlays stop many homebuyers from qualifying. So even if you have been turned down in the past, give us a call! Michael Gracz is also an expert on non-QM loans and bank statement loans for self-employed borrowers. There are no waiting periods after housing events and/or bankruptcy with non-QM loans. We know Katrina hit the state hardback in 2005, causing over $81 billion dollars in damages. It has been many years but seems like it was just yesterday. The state as a whole has come a long way and is now an amazing place to live. Home prices and property taxes attract many homebuyers to the Louisiana housing market. Reach out to the Gustan Cho Associates today to get qualified and approved for an FHA Loan With Bad Credit In Louisiana.

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