     Mike (Mike) | Thursday, April 12, 2001 - 02:13 am 
Went and applyed for the FHA construction loan Tue. We had all ready met with this lender a few weeks back when she pulled our credit & said we were eligable for the FHA.
Spent 1 1/2 hours doing paper work. We get all done, she hands us the truth & lending papers. Then she says, "Oh, your BK is not out of discharge long enough. It must be two years." Which would be the beggining of Dec. this year. It's two years from filing at the moment.
Then she says we'd have to go conventional. Which of course means higher rates, more down & throws us right out of the running to do this.
The way FHA works a construction/perm loan is it is a regualr construction loan with the FHA as the permanent. So if the house wouldn't even be finished until November, 2001. The actual FHA would then be started on the two year mark.
So what's the problem? Has anyone done this type of loan? Thanks |
| Don Semler (Dsemler) | Thursday, April 12, 2001 - 05:31 pm
Something doesn't smell right here.
First, Conventional rate are not higher than FHA.
What this sounds like is subprime rates or what is also know as B/C Lending. This has all the signs, ie higher rate, more down, etc.
Exactly how much higher is the rate? Exactly how much more down.
Here are the guideline from FHA regarding Bk's:
E. Bankruptcy. A bankruptcy (Chapter 7 liquidation) will not disqualify the borrower if at least two years have passed since the bankruptcy was discharged and the borrower has reestablished good credit (or has chosen not to incur new credit obligations), and has demonstrated an ability to manage financial affairs. An elapsed period of less than two years (but not less than twelve months) may be acceptable if the borrower can show that the bankruptcy was caused by extenuating circumstances beyond his or her control and has since exhibited an ability to manage financial affairs and the borrower's current situation is such that the events leading to the bankruptcy are not likely to recur.
A borrower paying off debts under Chapter 13 of the Bankruptcy Act may also qualify if one year of the pay-out period has elapsed and performance has been satisfactory, and the borrower also receives court approval to enter into the mortgage transaction. [Page : 2-6 09/95] |
| Mike (Mike) | Thursday, April 12, 2001 - 06:12 pm
The Bk is a discharged Ch 13 since 12/99. Plenty of good reestablished credit. No outstanding debt. Income qualifys for loan amount requested.
This lender said we had to be discharged from the ch 13 for two years.
If in a BK 13 you can qualify with one year of payments in to it. Why wouldn't we qualify being out of the Ch 13 for a 1 1/2? |
