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Can I settle defaulted school loans and still qualify for an FHA loan?

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renclan
Regular Contributor

Can I settle defaulted school loans and still qualify for an FHA loan?

Hey all,

 

My hubby has defaulted school loans and we are looking to resolve them. The original amount was 12,000 and now it's with a collection agency  through the DOE that has it at 16,000 with interest and fees. They have offered to settle for 11,800, but I am worried about whether I will qualify for an FHA after a settlement. I tried researching it and calling HUD, but they don't know either. If it is required to be paid in full through rehab, I don't want to waste the lump sum payment only to be denied because it was settled for less than was owed. Thanks!

Current FICO Scores: EQ 770, Trans 753, Exp 759
MyFICO Starting Scores/2015: EQ 677, Trans 695, Exp 674


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2 REPLIES 2
Anonymous
Not applicable

Re: Can I settle defaulted school loans and still qualify for an FHA loan?

There are 3 ways to get out of default: Pay off the balance in full, rehab the loan, or consolidate it into a Direct Consolidation Loan. https://studentaid.ed.gov/sa/repay-loans/default/get-out.

Message 2 of 3
Imperfectfuture
Super Contributor

Re: Can I settle defaulted school loans and still qualify for an FHA loan?


@Anonymous wrote:

There are 3 ways to get out of default: Pay off the balance in full, rehab the loan, or consolidate it into a Direct Consolidation Loan. https://studentaid.ed.gov/sa/repay-loans/default/get-out.


Better at 

 

https://studentaid.ed.gov/sa/repay-loans/default/get-out

 

Somehow, the other link did not work.  Smiley Wink

 

The comma was part of the link.

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