FHA Mortgage After Chapter 13 Bankruptcy Requirements
Qualifying For FHA Mortgage After Chapter 13 Bankruptcy
Home Buyers can now qualify for FHA Mortgage After Chapter 13 Bankruptcy with no waiting period after the Chapter 13 Bankruptcy discharged date. I get many calls by mortgage loan borrowers who just got their Chapter 13 Bankruptcy discharged and go to banks, credit unions, and other mortgage lenders and are told that they do not qualify for a FHA Mortgage After Chapter 13 Bankruptcy until two years after the Chapter 13 Bankruptcy discharged date. FHA Guidelines in qualifying for FHA Mortgage After Chapter 13 Bankruptcy states that there are no waiting period after the discharge date of a Chapter 13 Bankruptcy. Why are banks, credit unions, and most mortgage companies telling FHA mortgage loan borrowers that they need to meet a two year waiting period to qualify for FHA Mortgage After Chapter 13 Bankruptcy? This is because most banks have mortgage lender overlays when it comes to approving FHA Mortgage After Chapter 13 Bankruptcy and many mortgage lenders do not do manual underwriting. Mortgage lender overlays are additional mortgage lending guidelines that are required in addition to the minimum FHA mortgage lending guidelines that is set by the individual banks, credit unions, and mortgage companies.
FHA Mortgage After Chapter 13 Bankruptcy Are Manual Underwriting
All mortgage loan applications are submitted to the Automated Underwriting System for an automated approval. The Automated Underwriting System, also commonly referred as AUS, will render three decisions. Approve/Eligible per Automated Findings, Refer/Eligible per Automated Findings, and Refer/Ineligible per Automated Findings. Approve/Eligible per Automated Findings means that the mortgage loan applicant has a solid automated approval and mortgage lenders like myself who do not have any investor overlays on FHA Loans can close the FHA Loan as long as the borrower can meet all of the conditions from the automated findings. Refer/Eligible means that the borrower is eligible for a FHA Loan, however, the automated underwriting system cannot render an automated approval and needs to be manually underwritten by a mortgage loan underwriter. A refer/ineligible simply means that the mortgage loan applicant does not qualify for one or many reasons and do not meet the FHA Guidelines requirements.
All FHA Mortgage After Chapter 13 applications that have been seasoned for two years or less will render a referred/eligible per Automated Underwriting System and will require manual underwriting. However, many banks, credit unions, and mortgage companies are not set up to do manual underwriting so most borrowers who consult with mortgage lenders who do not do manual underwriting often are told that they do not qualify for FHA Mortgage After Chapter 13 Bankruptcy. If you have recently have a Chapter 13 Bankruptcy discharge and want to qualify for a FHA Mortgage, please contact me at 262-716-8151 or email me at firstname.lastname@example.org. We are available 7 days a week, evenings, weekends, and holidays to take your calls and answer all of your questions.
Other Requirements For FHA Mortgage After Chapter 13 Bankruptcy
All manual underwriting mortgage applications will require rental verification. Verification Of Rent is only valid if the renter has been paying their rental payments to their landlord with a bank check and can provide 12 months canceled checks to the mortgage loan underwriter. The renter can also provide 12 months bank statements if the renter has paid their rental payments online. Rental payments cannot be late and needs to have been timely in the past 12 months. If the renter has been renting their apartment or home from a registered property management company, then a VOR, Verification Of Rent, form that is provided by the mortgage lender can be completed and signed by the property management representative and be used in lieu of 12 months canceled bank checks and/or 12 months bank statements.