So… there have a been a lot of changes recently in both Conventional and FHA Guidelines. Things are getting… easier? Maybe not easier, but restrictions are definitely loosening. Somewhat.

Sometimes.

In places where a large segment of the population may not have the best credit score, may not have a long employment history, or may not have the required number of trade-lines open to qualify for FHA, like Miami, FHA has just come out with several new requirements.

· FHA and VA have entirely eliminated the need for minimum trade-lines (the old requirement was three).

· The waiting time after a foreclosure is completed to re-qualify for an FHA mortgage has been shortened from 4 years to 3 years. (*with a 640 minimum credit score)

· The waiting time after a Chapter 7 bankruptcy has been discharged has been shortened from 4 years to just 2 years. (*with a 640 minimum credit score)

· If you do not have a credit score that is reporting:

o A 43% maximum DTI (Debt-to-Income) ratio is necessary.

o A co-borrower is required who must have a minimum 640 credit score.

o There must be 3 non-traditional credit references

Depending on how reliant any finance or loan professional is on automated underwriting systems, they will very likely get an “refer” result from their software, which they will interpret as the end of the road. But if your advisor knows the ins and outs of the system this can be easily overcome.

As always, we’re here to help.