FHA Loan - Charged off private student loan

[Anonymous]

Hi Everyone, 

I’ve been scouring the forum and have read mixed responses on this question. I have an old private student loan from 2013 that has been charged off, reporting a zero balance. The statute of limitations has also passed in my state to collect. The account has never gone to collections and there is no judgement against me. I recently received pre-approval for an FHA loan. Will this completely derail me during underwriting? 

Thanks in advance!

[Anonymous]

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@Anonymous wrote:

Hi Everyone, 

I’ve been scouring the forum and have read mixed responses on this question. I have an old private student loan from 2013 that has been charged off, reporting a zero balance. The statute of limitations has also passed in my state to collect. The account has never gone to collections and there is no judgement against me. I recently received pre-approval for an FHA loan. Will this completely derail me during underwriting? 

Thanks in advance!

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I can't say whether or not if it will derail your loan.  I can say this though they might ask for a Letter Of Explanation (LOE).  If they do just keep it simple and be truthful say why it happened and how you fixed the issue for it not to happen again.

[VALoanMaster]

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@Anonymous wrote:

Hi Everyone, 

I’ve been scouring the forum and have read mixed responses on this question. I have an old private student loan from 2013 that has been charged off, reporting a zero balance. The statute of limitations has also passed in my state to collect. The account has never gone to collections and there is no judgement against me. I recently received pre-approval for an FHA loan. Will this completely derail me during underwriting? 

Thanks in advance!

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Hi Trkan001,

As long as it wasn't government backed & it was charged off, this account should not be an issue. If the lender you're working says otherwise, it's time to find a new lender.