@Anonymous wrote:
My husband and I are looking at purchasing a home in the near future and going with a FHA loan due their more relaxed requirements. I have searched this site for hours and have found conflicting information re: the start date of the three year waiting period following a foreclosure. My husband had a home that was foreclosed on in 2013. The Sheriffs sale took place in November of 2013 wherein it appears the deed assignment went to the bank at that time. Do they go by the Date of the Sheriffs sale?? I found where the bank had sold the property in March of 2014. Does anyone know what the answer is? Also what documentation do you need to show for FHA financing to prove said date? Does FHA require reserves if you have had a foreclosure in the past? Everything else is in place. Our ratios are 15/39, median credit scores are 649-687,and we are looking forward to buying a home together. This waiting process is definitely frustrating.
^^^This is the date that is used - the date the deed was transferred to the bank. All you have to do is show the deed back to the bank to prove the date. It is public record, you can usually download it from the property appraisers website. The normal waiting period is 3 years from the date the deed has transferred back to the bank. My lenders have required that you wait until the day after the deed transfer date to write an offer.
Reserves are lender specific. FHA doesn't require reserves, but your lender may require them. Make application with a correspondent lender/mortgage banker - not a big box bank type lender. The big box lenders have more restrictions and in some cases simply do not want to do FHA loans (eg Chase, BOA, Quicken) because of their own issues. You will save yourself time, money and heartache by NOT using a big box bank.
I am assuming you are using the expected monthly mortgage payment to generate your ratio of 15/39. If not, then you will need to recalculate using the expected payment for the new property. As far as scores, the lender uses the lowest mid score of the applicants. So if the lowest mortgage mid-score is 649 that will be the score that is used. Should be fine for most FHA lenders (some want 660, but most are 620 or 640).
