FHA vs Fannie Mae

[bhnole]

Can anyone give me a rundown of the advantages/disadvantages of each?

My Ch 7 filing where the Mortgage was discharged was dismissed 5 years ago.    However thanks to BOA's slow foreclosure process in Florida the actual foreclosure took another 2 and half year. 

I am running into FHA underwriters telling me I have to wait the 3 years.  My mid score is 706 right now and my DTI is 11% so those are not issues.  I can come up with 3 to 5% down. 

The only thing holding me back is the clock on the Foreclosure.   Fannie Mae advertises they go 4 years from the Bankruptcy so is that a route I can take??  Seems like lenders are steering clear of offering Fannie Mae as an alternative product??

[frugalQ]

the biggest difference between the two is the fact that you must pay upfront MIP (PMI) and if you put down less than 10%, FHA MIP is for the life of the loan.  with conventional loans, you can have PMI removed once you to 22% equity in your home.

also, FHA is good for borrowers with lower credit scores because you are not hit with crazy interest and PMI rates as a penalty for low scores.  Conventional PMI rates are tiered based on credit score and LTV.

with a mid score in the 700's, you may want to first look into conventional and then compare pricing with FHA.

good luck!!!

[Anonymous]

Unfortunately, you will have to wait seven years after the foreclosure if you want to go conventional. FHA is good to go three years after foreclosure.

[StartingOver10]

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@Anonymous wrote:
Unfortunately, you will have to wait seven years after the foreclosure if you want to go conventional. FHA is good to go three years after foreclosure.

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Wasn't there a recent mortgagee letter allowing the lender to use Bk discharge dates (only if the OP was discharged and not dismissed)? By recent, I mean within the last year.

Here is the link I was thinking of (posted by Shanethemortgageman in the stickies above) http://ficoforums.myfico.com/t5/Mortgage-Loans/BIG-changes-to-Fannie-Mae-s-policy-regarding-mortgages-included/td-p/3294446

I know that if the OP actually had his Bk dismissed and not discharged then the f/c rules apply. 

OP, did you get a discharge or was your Bk dismissed?  It makes a difference. Also, the amount you put down makes a difference.

[bhnole]

My bad it was discharged.

The reason I ask is Fannie Mae had announcements about low down payment programs of 5%.  Which is not that far off from FHA's 3.5.

[Anonymous]

SO10, ah yes, you are correct! Only if discharged, and only for Fannie Mae I believe (not Freddie Mac).

[DallasLoanGuy]

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@bhnole wrote:

Can anyone give me a rundown of the advantages/disadvantages of each?

My Ch 7 filing where the Mortgage was discharged was dismissed 5 years ago.    However thanks to BOA's slow foreclosure process in Florida the actual foreclosure took another 2 and half year. 

I am running into FHA underwriters telling me I have to wait the 3 years.  My mid score is 706 right now and my DTI is 11% so those are not issues.  I can come up with 3 to 5% down. 

The only thing holding me back is the clock on the Foreclosure.   Fannie Mae advertises they go 4 years from the Bankruptcy so is that a route I can take??  Seems like lenders are steering clear of offering Fannie Mae as an alternative product??

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fannie says 7yrs on f/c......... unless it was from extenuating circumstances.m

i have been in the business 11yrs.... never seen an extenuating circumstance approved.

fha says wait 3yrs post f/c 

[DallasLoanGuy]

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@bhnole wrote:

My bad it was discharged.

The reason I ask is Fannie Mae had announcements about low down payment programs of 5%.  Which is not that far off from FHA's 3.5.

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they have an expensive 3% down program too