12-13-2011 08:31 AM
Without getting into specifics I have a quick question. I am aware that you cannot get a FHA loan with outstanding goverment loans...would that change if i immediatly paid off the student loan that is in collections?
12-13-2011 08:47 AM
Not an expert on the subject especially since my defaulted student loans were private however if they are paid off and have no balance I would not see why it would be an issue since that is similar to the "rehabilitation" program they have in place for defaulted student loans where you are then elligible for a new government loan. It might come down to an issue that you have to write a LOX but I can't see it as a complete denial for FHA.
12-15-2011 11:20 AM
In short, I would say yes (I also have unpaid defaulted private student loans, but I've researched the defaulted student loan-mortgage approval thing a lot) The issue is that you cannot obtain one government backed loan (an FHA mortgage) if you have another unpaid, defaulted government-backed loan (government student loans). However, if pay off the student loan to a $0 balance, then you no longer have an outstanding debt to the government and you should be able to get the FHA loan.
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