I want to try and get my 1st home in June 2008. I have no lates payments in 16 months, but I do have 2 hosipital bills from 2006 that was just added to my credit report in Sept 2007. The credit report show date open as Sept 2007, although the bill was generated in 2006. The two bills are $473 and $22.
Will this ruin my chances of FHA? I mean, I have been doing good with paying my student loan and credit card bill on time. Can the hospital bills effect chnaces of FHA? Will I have to wait another year?
FHA does not require outstanding collection accounts to be paid off (I just was approved through automated underwriting, and both me and the wife have collection accounts on our reports). The exceptions are any federal delinquencies (tax liens, delinquent federal student loans) and judgements, which must be satisfied.
Some of the lenders who provide the financing for the FHA loans will have stricter guidelines than the FHA mandates - many (but not all) will require non-medical collections to be paid off (mine didn't). From what I've heard, few, if any, lenders will require medical collections to be paid.
The age of the accounts is important though - they don't want to see any collections within the past two years, and no lates in the past year IIRC. Don't know whether they'd have a problem with recent medical collections.