Tuesday, August 1, 2017

Kentucky FHA Guidelines for Credit scores, First-Time Buyers, Co-signors, Collections, Mortgage Insurance Refinances, Bankruptcy and Foreclosure

Kentucky FHA Guidelines for Credit scores, First-Time Buyers, Refinances, Bankruptcy and Foreclosure

11 Questions and Answers below about the FHA loan program: 

1. Q -  Can only first-time home buyers use a Kentucky FHA loan program?

A -  No. You can use a Kentucky FHA loan as many times as you desire. The only guideline is that you cannot have more than one outstanding Kentucky FHA loan with a loan to value of higher than 75%. You can own rental property and purchase your primary residence using Kentucky  FHA financing. 

2. Q - Does FHA use a FICO credit score for qualifying?

A - Yes, FHA requires a credit score. Depending on investor and program, some FHA investors will go as low at 550 on a score, but most FHA lenders that I work with want a 620 score. You have three fico scores and they take the middle score.

3. Q - Can I streamline refinance my FHA loan at any time?

A -  Yes, you can streamline assuming that the you are lowering your monthly payments or converting the loan to a fixed rate with at least a $50 monthly saving.s 

4. Q - Can I purchase a 4 Unit Home with FHA mortgage financing?

A - Yes, you may use FHA financing for 2,3, or 4 unit home purchase assuming that the loan amount does not exceed the maximum loan limits for where the property is located

5. Q - Can I buy a home with no down payment and get 100% financing using a FHA loan?

A - Yes. Using a FHA insured first mortgage in combination with other specialized programs, such as KHC with their down payment assistance program., you may be able to purchase a home with no money out of pocket.

6. Q - How long after a bankruptcy can I buy a home using FHA financing?

A - You may purchase a home using FHA financing two years after the date of discharge for a Chapter 7 and 1 year for a Chapter 13 bankruptcy, assuming that you have maintained excellent credit since the discharge. 

7. Q - How long after a Foreclosure can I use FHA financing to buy a home?

A - Three years after the final date of foreclosure you may use FHA financing to buy another home, assuming that your credit since the foreclosure has been excellent.

8. Q - Can I get rid of of the FHA Mortgage Insurance if I have 20% equity?

A - The only way to remove the FHA mortgage insurance is to refinance the loan to a conventional loan. FHA Mortgage insurance if for life of loan no matter your equity position

.9 Q - Do I have to pay off collections accounts before applying for a FHA loan?

A - Typically all collection accounts that are non-medical and judgements should be paid off before applying for a FHA mortgage. You should get prequalified by a mortgage professional before paying any items off. This varies greatly so consult a loan officer and have them pull your credit and submit for a pre-approval before paying any collections off. Judgements usually have to be paid off. 

10. Q - Can I get a FHA loan if I have a federal tax lien?

A - You may qualify for a FHA loan even with a Federal tax lien, as long as it has been in a repayment schedule for at least 6 months and all payments have been made on time. The monthly payment will be counted against you as a monthly liability and will affect the amount of the loan you will qualify for. State tax liens must be paid off in full.

11. Q - Can I have a cosigner that is not living in the property?

A - Yes, you may have a cosigner that is not living in the home help you qualify for a mortgage but their rent, mortgage payment, or monthly bills will be used in qualifying. Also, they cannot currently have a FHA loan in their name.

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only.  The posted information does not guarantee approval, nor does it comprise full underwriting guidelines.  This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer Not all products or services mentioned on this site may fit all people.