The Federal Housing Administration has opted to delay a rule that would have prevented home buyers from getting a government backed (insured) mortgage if they had an ongoing credit dispute exceeding $1,000.
The rule was slated to take effect on April 1st – but the FHA has elected to delay enforcing the rule until July 1st.
The rule would have required buyers with collection accounts to either pay off the debt or enter into a document payment plan in which at least three months of payments would be required. Previously, an underwriter was responsible for determining if a collection account would impact the approval of the mortgage.
The FHA intends to seek out feedback from builders, lenders, and others in the real estate and mortgage industries before the July 1st deadline.
Data on how this rule would affect potential homeowners is for the most part – unavailalbe. Some industry experts estimate that demand for FHA insured mortgages may drop substantially.
Since monthly insurance premiums have increased and up front mortgage insurance premiums have been initiated – many homebuyers may find conventional mortgages and private mortgage insurance options more beneficial. For more information on whether an FHA mortgage or conventional mortgage loan is best for you, contact us at 239-936-4232.
Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved.