Changing from USDA to FHA and have questions...

[steph13]

I posted last week--we were trying to do a USDA with 640+ scores, but were bumped into manual underwriting due to BK discharge date (34 months vs. the 36 needed--we were ultimately denied!). Anyway, we are now going FHA, but we weren't expecting to have to come up with anything down except for some of the closing costs. My first question involves getting a gift towards the down payment and with our part--at what point will all of the money need to be in our account prior to closing? We are going to be cutting it close, but my parents are willing to "gift" us anything we can't come up with--but we want to pay as much of it as possible.

Also, we were approved through automated underwriting this time. What exactly will they look for when it goes to underwriting? Will they even look at rental history, etc.? Our lender told us that USDA has a very strict process for manual underwriting, so I'm hoping automated FHA will be easier. We do have a $50 collection that popped up 2 years ago that we only recently found out about (PFD did not work with the agency). We have a paid off tax lien that was from money owed prior to the BK, but not filed till a few months after. Should any of these be an issue? I would appreciate any responses, as we have been going round and round on the USDA for a month.

Thanks!

[BrianB_The_Loan_Professor]

You will need to allow enough time for the funds to be documented and provided to the UW for final approval

I would ask your LO as each bank will have their own protocol for this -

If you have an automated approval they will go off ofthose findings - they will still want every T crossed and I dotted but thats the case on every loan these days

Basically if you can provide supporting documentation to prove everything on the application you should be fine

Good Luck

Brian