Refocused - FHA after foreclosure

[radfam]

Hi all!  I've been lurking again and refocusing my sights towards home ownership.  Background, DH had an FHA loan for a house that we moved from in Dec 2014 when we moved five states away for work.  We had that house listed and it never sold (thanks to the crappy housing market in my homestate) and it eventually foreclosed.  I was not listed on the loan but I did sign documents at closing.  Fast forward to Feb 2018.  I jumped the gun, thinking I wasn't named in the foreclosure, and started paperwork to get prequalified.  Everything looked great except, of course, the foreclosure.  The Lender said everything should be good to go on October 2, 2018, as that will be one day after the three year mark.  I was bummed for sure and literally just took a break from MF and from even thinking about home ownership for a few months.  I didn't make any big changes, kept on doing what I was doing in regards to bill payment/credit/debt/etc, but also didnt look at my reports at all so I obviously lost some traction on report priming.

So here we are, end of May, just a few months out from when I would be "seasoned" for consideration of another FHA loan.  I've never had a mortgage loan in my name.  I have questions on moving forward.  I won't be eligible for anything except FHA being 3 years post foreclosure, so I'm working on that assumption.  Are there benefits for being the sole purchasing spouse?  We live in Texas, a community property state.  My mid score is 633 (614, 633, 654 on mortgage scores as of today).  DH's is lower at 543 (532, 543, 607).  Obviously we will need to work on both our reports and scores in the next few months so that is some focus.  Adding my own "Do I Qualify" info below as well, just for reference.  Not really asking if I qualify because I already know that answer.  I guess I'm hoping someone can provide some clarity for DH and I about getting an FHA loan later this year, what kind of options we will have for including/excluding him, and anything else we might need to consider.  I am thinking if I do not include him, they still need to run his credit report. I don't know how that works with what scores they would use.

1. Mortgage Credit Scores:  
 - TU 654, EX 633, EQ 614

2. Credit Negatives: 

1 med collection 2013 for $200 (still unpaid, working on removal) on all 3 CRs

1 med collection 2012 for $285 (paid, didn't know better at the time to ask for PFD, working on GW now but so far nothing)

15 adverse accounts total:  History of late payments on installment accounts (last 30day late was 1y3m ago on auto loan, now have everything on autopay), nearly all adverse accounts (11 in total) are closed federal student loan accounts that have since been consolidated.  Some of those SLs are reporting as "was a charge off" or "payment after charge off."

1 GM auto loan "Paid in Full/Was a Charge Off" (Bal reporting $0)

3. Gross Income.  $108,660  self (DH is at 75k but that is not included in this number)

4. Source of income.  Where is the income coming from? List each source.

• Full time Employment - 93600
• 10% annual bonus - 9400
• child support - 5700

5. Monthly debt payments. 

• Lease Vehicle Payment- $564 with 3 years left on note
• Student Loans: IBR $324/mo. Consolidated loan amount is approx. 113,000. 
• 3 credit cards (would need to get balances but all are low utl, less than $500 total across all cards, with CL at $4k)

6. Employment (for those who are employed). 

• Type of employment: Full time employment for 3y4m at current company 
• How long have you been in the industry/career field: 6 years

7. Assets/Reserves. This is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).

• Savings- $30,000 (401k & pension, I would be pulling DP from 401k)
• Checking- $4500 

8. Location:  This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.

 - Houston, TX

9. Property Description: 

• single family home (Self, Spouse, and 5 kids)

10. Property Value. 

• Purchase transaction: Price range <$300k

[radfam]

1. Mortgage Credit Scores:  
 - TU 654, EX 633, EQ 614

[radfam]

2. Credit Negatives: 

[radfam]

1 med collection 2013 for $200 (still unpaid, working on removal) on all 3 CRs

[radfam]

1 med collection 2012 for $285 (paid, didn't know better at the time to ask for PFD, working on GW now but so far nothing)

[radfam]

15 adverse accounts total:  History of late payments on installment accounts (last 30day late was 1y3m ago on auto loan, now have everything on autopay), nearly all adverse accounts (11 in total) are closed federal student loan accounts that have since been consolidated.  Some of those SLs are reporting as "was a charge off" or "payment after charge off."

[radfam]

1 GM auto loan "Paid in Full/Was a Charge Off" (Bal reporting $0)

[radfam]

3. Gross Income.  $108,660  self (DH is at 75k but that is not included in this number)

[radfam]

4. Source of income.  Where is the income coming from? List each source.

[radfam]

9. Property Description: 

• single family home (Self, Spouse, and 5 kids)

10. Property Value. 

• Purchase transaction: Price range <$300k

[me12345]

Were the debts listed just yours or for both of you?

Because Texas is a Community property state, and you would be doing an FHA loan, you must factor in the Non-Borrowing Spouses (NBS) debts also.

So if these are your total household debts, then you are good....If your husband has additional debts also, then you have have a problem.

Thanks,

[radfam]

Oh shoot!  Thank you for that.  I didn't catch it that I failed to list DH's debt.  He has student loans, roughly 30k.  No cc payments, no car note, etc.

[me12345]

What is the payment amount of his SL or what would the payment be?

Thanks,

[radfam]

Its deferred for now but will be on IBR, roughly $150 estimate I believe.  I've sent him a message to ask what his payment will be once it resumes.

[me12345]

With his student loan factored into the DTI, you could qualify right now with your income and your FICO score....your payment would be limited to about $2,800.00 per month,  but that should be enough for a $300,000.00 home, even with your high Texas property taxes.

You are fine....just work on getting your score up a little more so you can get a better FHA rate.

Thanks,