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Federal loans currently in rehab; FHA loan impossible? If so, conventional loan possible?

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New Visitor

Federal loans currently in rehab; FHA loan impossible? If so, conventional loan possible?

Hi there!
My husband and I have an unexpected and great opportunity to buy a house. However, I am currently in a loan rehabilitation program for student loans. The default began back in 2016 and I've been making good faith payments august of 2016 but only officially in rehab for three months.

I've read conflicting information about my eligibility for an fha loan. I've seen threads and language in the HUD handbook that I can obtain an fha loan if I show I'm in a repayment program. Which is correct? Can I potentially qualify for an fha loan?

In fha is not possible, what is the likelihood a lender will qualify me for a 3% down conventional loan (since the CAIRVS check isn't necessary?). My middle credit score is 620 and my debt to income is good. We also have great payment history on our auto loan and I have two private student loans with no late payments showing.
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Legendary Contributor

Re: Federal loans currently in rehab; FHA loan impossible? If so, conventional loan possible?

It is likely discretionary on the part of the individual lendor.

Do you have a potential lendor in mind?  If so, I would give them a call and request preliminary advise from them on exactly how they interpret or apply any discretionary criteria on FHA loans.

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Regular Contributor

Re: Federal loans currently in rehab; FHA loan impossible? If so, conventional loan possible?

I think you should be OK. I got an FHA loan while in rehab. I was honest about it. You may have to write a letter stating that you are paying your student loans on-time. Talk to your mortgage broker about it.




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