✅1. FHA Loan Requirements After Chapter 13 Bankruptcy On Home Purchase

* Under HUD Guidelines, home buyers and homeowners can qualify for a FHA Loan after Chapter 13 Bankruptcy with no waiting period.

– HUD (The U.S. Department of Housing and Urban Development) is the parent of the Federal Housing Administration (FHA)
– VA Guidelines in qualifying for VA Home Loans during and after Chapter 13 Bankruptcy is exactly the same as those of FHA

2. Verification Of Rent Requirement On Manual Underwriting

* Verification Of Rent is mandatory for all manual underwriting FHA Loans:

– Home Buyers who are living rent free with family, relatives, and friends unfortunately cannot provide rental verification
– Rental Verification is required with manual underwriting
– However, we can accept borrowers who are living rent free with family with a rent free letter
– Home Buyers who can afford rent often times live with family, relatives, and friends rent free so they can save enough money and develop reserves for a home purchase
– But under the eyes of mortgage regulation experts, this is not acceptable and rental verification is required with lenders with overlays
– Gustan Cho Associates Mortgage Group at Loan Cabin Inc. has no overlays and can qualify borrowers living rent free as long as the reason is to save money for down payment on home purchase

3. Other Requirements

* Other requirements to qualify for a FHA Loan During and After Chapter 13 Bankruptcy includes the following:

– Minimum credit score 580
– Minimum down payment for borrowers with at least 580 credit score is 3.5% down payment
– Up to 6% sellers concessions is allowed by sellers to contribute for buyers closing costs
– Sellers concessions can only be used for closing costs and cannot be used for down payment
– Underwriter decides the maximum debt to income ratio on manual underwrites
– I have seen manual underwriting borrowers get approved with 50% debt to income ratios as long as they had strong compensating factors
– No late payments during and after the bankruptcy discharged date

Please contact Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. Gustan Cho Associates is the national consumer direct division of Loan Cabin Inc., a direct lender with no lender overlays on government and conventional loans.

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