Finance options gentry june 2014

Quick Intro
• Instructor at the Arizona School of Real
Estate and Business for 5 years
• Mortgage professional for 17+ years
• Former Big4 auditor
• ASU Grad (4th
Generation)
• Husband and Father
AZ SAFE - Laws for Mortgage Loan Originators

What is “The New Era”?
• What is going on in the market right now?
• What are you seeing?

Phoenix home-price increases stall as sales fall
Catherine Reagor, The Republic | azcentral.com 4:32 p.m. MST June 11, 2014
•Metro Phoenix home sales prices flattened out in April, one of the prime months for the area's housing market. And
the forecast isn't upbeat for price increases during the rest of 2014.
•Metro Phoenix home-sales prices were flat in April, one of the region's prime sales months. And the forecast isn't upbeat for
price increases during the rest of 2014.
•The median sales price of a Valley house was $205,000 in April, according to the latest report from the W.P. Carey School of
Business at Arizona State University. That compares with $204,900 in March and $205,000 in December.
•"The market has completed its rebound from the artificially low prices that prevailed between 2009 and 2011, and further
significant increases are unlikely without some growth in demand," said Mike Orr, director of the Center for Real Estate
Theory and Practice at W. P. Carey.
•Fewer sales are the reason behind the price stagnation. The number of home sales was down 16 percent in April compared
with April 2013. But the supply of houses for sale is up. The number of houses on the market as of May 1 was 73 percent
higher than on the same date later year.
•Orr said the number of listings could fall if demand and prices don't pick up because potential sellers might opt to stay out of
the market, waiting for a better time to make a profit on their house.
•He said investors continue to lose interest in Phoenix's housing market, instead buying in other parts of the country where
there are more foreclosures and lower home prices.. About 16 percent of all sales in April were investor-driven, down from a
peak of 40 percent in July 2012. That's adding to the slowing of sales and adding to the downward pressure on prices.
•Median-sales prices have been flat in 2014 but still are showing increases compared with last year.
•http://www.azcentral.com/story/money/real-estate/2014/06/11/phoenix-home-price-increases-stall/10344933/

• Ever-changing guidelines

Finance Options
• Conventional Loans
• Government Loans
• CFPB and QM
• Down Payment Assistance
• Niche Loan Programs

Mortgage Principles and Practices 4th Edition (02/21/2012)
Chapter 6: Conventional Financing
Conventional Loans
• Usually made by bank or institutional lender
• Not insured or guaranteed by a government
agency
• Conforming
–Written to guidelines set by government-
sponsored entities
• Freddie Mac
• Fannie Mae
–May be sold in secondary market

Conforming Loans
• Meet Fannie Mae/Freddie Mac standards
• May be sold on secondary market
• Qualifying standards
– 28% housing expense ratio
– 36% debt-to-income ratio
• Borrower must qualify under both ratios
• Borrower should have at least:
– 5% own funds for down payment
– 2 months of reserves on deposit

Conventional Programs
• Classified by percentage of down payment
• Loan-to-value: Amount borrowed compared
to property value
– Lesser of sales price or appraised value
• Higher LTV = lower down payment = more
risk
• Standard 80% conventional loan requires
20% down

Higher LTV Loans
• 90%, 95%, loan-to-value
• Possible because of private mortgage insurance
(PMI) and secondary financing
• More stringent qualifying standards/may not be
available
• May have higher interest rates, fees, etc.
• 90% LTV
– At least 5% of down payment from personal cash
reserves
• 95% LTV
– Requires owner-occupancy
– Entire down payment from personal cash reserves

Private Mortgage Insurance (PMI)
• Offered by private companies to insure
lender against borrower default
• Allowed lenders to make loans above 80%
LTV
• Required on loans with less than 20% down
• PMI premiums:
– Fee at closing w/ renewal premium
– One-time PMI premium
– Lender paid mortgage insurance (LPMI)

PMI: Cancellation
• Mortgage insurance fulfills purpose when risk of
borrower default reduced
• Homeowners Protection Act (HPA)
– Applies to single family, owner-occupied homes
– PMI automatically cancelled at 78% LTV if borrower not
delinquent
– Borrower may request cancellation at 80% LTV if
borrower shows timely repayment for 12 months
• When cancelled, monthly payment reduced by
premium amount
• Does not apply to upfront / one-time PMI premium

Chapter 7: Introduction to Government Agency Loan Programs
Federal Housing Administration
• FHA insures mortgage loans made by approved
lenders
• No have income limits
• Eligibility:
– U.S. citizen
– Permanent resident
– Non-permanent resident with qualifying work visa
• Sets maximum mortgage amount
• FHA part of Department of Housing and Urban
Development (HUD)
• Oversight through HUD’s Office of Housing

FHA: Underwriting Standards
• Underwriters consider 4 C’s:
– Credit history of the borrower
– Capacity to repay the loan
– Cash assets available
– Collateral
• Must pay off any outstanding court-ordered
judgments
• Cannot be in default on any federal loan
– Confirmed through Credit Alert Verification Reporting
System (CAIVRS) database
• Must have sufficient income to service all debt
• Qualifying ratios somewhat more liberal

FHA: Payment to Effective Income
• Relationship of borrower’s total monthly housing
expense to income, expressed as percentage
– More commonly referred to as the housing
expense ratio
• Total mortgage payment (PITI) may not exceed
31% of gross stable monthly income
$3,200 Stable monthly income
x .31 Housing expense ratio
$ 992 Maximum monthly housing expense

FHA: Debt-to-Income
• Relationship of borrower’s total monthly debt
obligations to income, expressed as a
percentage
– Includes housing and other long-term debts that
will not be cancelled
• Back end ratio given primary consideration
by TOTAL Scorecard
• Borrower’s total expenses cannot exceed
43% of monthly income

FHA: Compensating Factors
• If applicant exceeds either 31/43 ratio, lender must document factors that mitigate risk:
– Housing expense ratio
– Down payment
– Accumulated savings
– Previous credit history
– Compensation/income not reflected in effective income
– Minimal housing expense increase
– Substantial cash reserves
– Substantial non-taxable income
– Potential for increased earnings
– Primary wage-earner relocation

FHA: Property Eligibility
• Eligible one- to four-family dwellings include:
– Detached or semi-detached dwellings
– Row houses
– Multiplex dwellings
– Individual condominium units (if approved)
– Some manufactured housing
• Independent utilities and other facilities must
include:
– A continuing supply of safe, potable water
– Sanitary facilities and a safe method of sewage disposal
– Heating adequate for health and comfort
– Domestic hot water
– Electricity for lighting and equipment

FHA: Property Conditions
• Lender requires repairs necessary to:
– Protect health and safety of occupants
– Protect security of the property
– Correct physical deficiencies or conditions
affecting structural integrity

FHA: Property Occupancy
• Must establish bona fide occupancy as principal
residence within 60 days of signing mortgage
• Must live in the house for at least one year
• Generally may have only one FHA loan at a time
• Non-occupying co-borrower limits LTV to 75%
unless:
– Family member
– Someone with documented evidence of long-
term relationship separate from loan

FHA: Maximum Mortgage Amount
• HUD limits the maximum loan amount by
community (county, zip code, or metropolitan
statistical area)
• Loan amounts reviewed every 3 years
• Maricopa County limit is currently $271,050
• Different limits for 2-, 3-, and 4-family
• Higher limits in some areas
• Current schedule of maximum limits available here:
https://entp.hud.gov/idapp/html/hicostlook.cfm

FHA: Minimum Required Investment
• 3.5% minimum required investment of sales price
or appraised value, whichever is less
– 10% minimum required investment for credit score less
than 580
• Closing costs may not apply to 3.5%
• Entire minimum investment may be non-repayable
gift from relative, employer or labor union,
charitable organization, close friend with clearly
documented interest
– Gifts may NOT come from interested third party
• Requires signed gift letter stating no repayment
required

FHA: Secondary Financing
• Government or approved nonprofit second lien
permitted
– Total loan cannot borrower ability to pay
• Individual/company second lien permitted with prior
approval if:
– Secondary financing disclosed at application
– Minimum cash investment is not financed
– CLTV does not exceed FHA mortgage limits,
– Borrower can make payments on both
– Any periodic payments are level and monthly
– No balloon for first 10 years
– No prepayment penalty

FHA: Seller/3rd
Party Contributions
• Seller and/or third party limit 6% of sales price or
appraised value, whichever is less
– Permanent and temporary interest rate buydowns
• Borrower must qualify at note rate for temporary
– Mortgage interest for fixed rate
– Mortgage payment protection insurance or UFMIP
• Contributions above limit are considered
inducements
– Must be subtracted from sales price before applying LTV
• Pending: HUD indicated intention to reduce
allowable seller contributions to 3%

FHA: Assumption and Prepayment
• Loans prior to 12/15/1989 assumable with small fee
– No alienation (due on sale) clause
– Original borrower liable unless FHA agrees
• To assume loans endorsed on or after 12/15/1989:
– FHA creditworthiness review
– Fee
• Assumption without approval may accelerate debt
• No prepayment penalties allowed
– Lender may collect remainder of month’s interest
if not paid on the first of any month

FHA: Mortgage Insurance Premium
• Required for all FHA loans
• Upfront (UFMIP)
– On or after 4/9/2012 = 1.75% loan amount
• Monthly MIP based on LTV and type of loan
– 30-year loan 1.30% if LTV <= 95% / 1.35% if LTV > 95%
• May be paid in cash at closing
– Borrower, seller or third party (within limits)
• More commonly financed into loan up to 100% LTV
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/comp/premiums/sfpcalc

FHA: Mortgage Insurance Premium
http://www.forbes.com/sites/markgreene/2014/05/08/hud-commissioner-wrong-about-fha-
mortgage-insurance/

FHA: 203(b) Loans
Loan Program Description Conditions
Section 203(b)
Home Mortgage
Insurance
•Basic owner-
occupied loan for
one- to four-family
dwelling
•Any term up to 30
years, fixed
•3.5% down
•Maximum 1%
origination fee
•Requires UFMIP
(1.75% as of
4/9/12) and monthly
MIP up to 1.25% of
loan balance
•Max. loan amounts
$271,050 to
$729,750 (location)

VA-Guaranteed Loans
• Guaranteed by federal government through
the Veterans Benefits Administration
– Part of the Department of Veterans Affairs
• Help meet housing needs of eligible veterans
• Owner-occupied single family
• 1- to 4-unit multifamily if vet occupies one
unit as principal residence
• Rarely loans money directly
• Approved lenders and Automatic Endorsers
• Lender’s Handbook: www.homeloans.va.gov

VA: Eligibility
• Based on continuous active service
–Spouses of vets who died on active duty or
MIA/POW may be
eligiblewww.homeloans.va.gov/elig2.htm
• Certificate of Eligibility (COE) issued by VA
with proof of service:
–DD-214 discharge papers
–NGB Form 22/23
–Statement of service

VA: Entitlement/Maximum Loan
• Guaranty limited to 25% lesser of purchase
price or established reasonable value
• Entitlement documented in COE
• Vets may generally purchase home up to 4
times entitlement with no down payment
• Annual loan limit set by county
– Most counties $417,000 in 2010
– www.homeloans.va.gov/loan_limits.htm
• If entitlement insufficient or limit exceeded:
– Eligibility + down payment + equity must = 25%

VA: Restoring Entitlement
• Eligibility may be restored and used for
another VA loan if:
–Property is sold and loan paid in full
–Eligible veteran assumes outstanding
balance and substitutes his/her entitlement
• Must meet occupancy, income, and
credit requirements

VA: Qualifying Standards
• Must be satisfactory credit risk with means to
repay loan
• If legally married, spouse income may also
be considered
– Non-married co-borrower not allowed unless also
an eligible vet occupying as principal residence
• Housing expense ratio (front end) not
considered
• Debt-to-income ratio should not exceed 41%
– Tax-free income may be grossed up to calculate

VA: Residual Income
• Income remaining after subtracting taxes, housing
expenses, recurring debts
• Ensures adequate cash flow for family support
• Uses net effective income, not gross
• Considers size of veteran’s family
• Requirements determine regionally based on loan amount

VA: Variable Funding Fee
• No upfront or monthly mortgage insurance premiums
• Must pay one-time non-refundable variable funding fee at
closing
– Waived for disabled veterans and some surviving
spouses
– May be financed (added to loan amount) or paid in cash

VA: Seller Concessions
• Anything of value added to transaction that
seller does not customarily pay, for example:
– Funding fee
– Prepaid property tax/insurance
– Permanent buydowns
– Payoff of other credit balances
• Closing costs/points typically paid by seller
are not considered concession
• Seller concessions over 4% reasonable
value are unacceptable

VA: Secondary Financing
• Simultaneous secondary financing permitted
• Cannot be in substantially worse position than if
entire amount guaranteed by VA
• 2nd
loan must be subordinated
• No cash-back
• Must qualify for 2nd
mortgage as recurring monthly
obligation
• Interest rate on 2nd
mortgage may not exceed
industry standards
• 2nd
mortgage should not restrict ability to sell any
more than VA 1st
mortgage

VA: Assumption and Prepayment
• Loans closed on/after 3/1/1988 require VA /
lender approval for assumption
– Vet is released of liability in event of default
– Eligibility may be restored if:
• Assumer is an eligible veteran
• Assumption has been approved
• Assumer agrees to substitute entitlement and
occupy as principal residence
• Prepayment penalties are prohibited
– May be allowed for secondary financing

VA: Purchase Loans
Program Description Conditions
Purchase
Loans
•100% financing for
1- to 4-family
•Loan terms
negotiated
•Repayment plans:
–Fixed
–Traditional ARM
–Hybrid ARM
–Graduated payment
–Growing equity
•Owner occupy
as primary
residence
•25% guaranty
–Entitlement
–Down payment
–Equity
•Non-refundable
funding fee
•Lender flat 1%
fee

Comparing FHA and VA Loans
FHA VA
Borrower eligibility Any qualified
borrower
Eligible veteran
only (COE and
DD-214 or
equivalent)
Property units
Owner-occupant only
1-4
Yes within 60 days
1-4
Yes within 60 days
Maximum loan
(cannot exceed
appraisal)
Cannot exceed
maximum for
geographic
location
No limits

FHA VA
Borrower qualifying
standards
•Housing expense
ratio: 31%
•Total debt-to-
income: 43%
•Residual income
guidelines
•Total debt-to-
income: 41%
Lender protection Insured to full
extent of losses
from default
Maximum
guaranty amount =
25% loan
limit/county
Maximum interest
rate
Negotiated with
lender
Negotiated with
lender

FHA VA
Minimum required
investment/down
payment?
•3.5% if FICO 580
or above
•10% if FICO 500-
579
None unless loan
amount is greater
than 4 times COE
entitlement
Fee/insurance
premium required
UFMIP 1.75%;
monthly MIP up to
1.25% of annual
average loan
balance
Variable funding
fee 1.25% to
3.30% (unless
disabled); no
insurance
premium required

FHA VA
Fee financed? Yes (UFMIP) Yes
Closing costs
financed?
No No
Seller contribution
limit?
Yes, 6 points
(proposed
reduction to 3)
Discount points:
No limit (if
reasonable)
Seller concession:
4 points

FHA VA
Secondary financing? Yes, except
minimum down
Payment
Yes
Assumable loan? Not without FHA
creditworthiness
Check
Not without VA/
lender approval
Prepayment penalty? No No

USDA: Rural Development
• U.S. Department of Agriculture Rural Development Housing
and Community Facilities Programs (HCFP)
• Grants and loans to rural communities for essential services
• Assist with single family and multifamily
– Housing
– Site preparation
– Rental assistance
– Water and waste
– Repair and rehabilitation
• Low-income homebuyers in rural communities
– Small towns up to 20,000
– Temporarily eligible in response to conditions, natural
disaster

USDA: Section 502 Loans
• Guarantees loans made by approved private
lenders
• Makes direct loans if no local lender is available
• May be used to:
– Purchase existing home
– Construct new home
– Renovate or repair existing home
– Relocate existing home
– Purchase and prepare site
• Eligible house must be modest and not exceed the
applicable area loan limit
• Applicants must meet area median income (AMI)
income requirements
• 100% LTV with no mortgage insurance

USDA: Section 502 Loans
Effective October 1, 2012, USDA mortgage
insurance rates are:
• For purchases, 2.00% upfront fee paid at closing,
based on the loan size.
• For refinances, 2.00% upfront fee paid at closing,
based on the loan size.
• For all loans, 0.40% annual fee, based on the
remaining principal balance.
Note that the annual fee is for the life of the loan. It does not
end with the loan-to-value reaches a certain point as with an
FHA loan.

QM Introduction
• After the mortgage meltdown in 2007, Congress passed and
implemented laws and regulations to protect participants in
all financial markets, including the mortgage industry
• These regulations and legislation affected participants from
the largest GSE or mortgage institution to the MLO who
works for a small broker shop
• This module provides updates and information on the
legislation and regulations recently implemented
SAFE Law – Federal Law
SAFE Law – Federal Law & Regulations ● 03/04/13

Overview of Dodd-Frank Act
• In 2007, homeowners faced the drastic consequences of slowing economy
• Congress held hearings concerning the mortgage meltdown, focusing on:
 the lack of a lenders’ consideration of a borrower’s ability to repay
 prepayment penalties, hybrid adjustable rate mortgages
 loans that required little or no documentation of income or assets (or both) as it
contributed to the number of foreclosures taking place
• The House of Representatives passed the Mortgage Reform and Anti-Predatory
Lending Act in 2007 and 2009, which never became law
• A new Congress, seated in January of 2009, set out for financial reform
• The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-
Frank Act), which established the Consumer Bureau
• Two Titles or parts pertain to the mortgage industry:
 Title X provides for the Consumer Financial Protection Bureau which has
enforcement and rule-making authority for regulations of the mortgage industry
 Title XIV is the Mortgage Reform and Anti-Predatory Lending Act and is
concerned with RESPA, TILA and CFPB as well as the mortgage industry’s
guidelines on enforcing a borrower’s ability to repay their mortgage loan

Mortgage Loan Market History:
The Last Decade (1 of 3)
• The mortgage market is the largest market for consumer financial
products and services in the United States
• $9.9 trillion dollars of mortgage loans are outstanding
• During the past ten years, mortgage markets went through cycles of
expansion and contraction fueled by securitization of mortgages and
sophisticated derivative products
• Many financial institutions contributed to the mortgage-related
housing market collapse in 2008, which caused the most severe
recession since the Great Depression
• Expansion results from interest rates declined over 20% in a 3-year
period & housing prices increasing over 150% from 1997 to 2006
• Growth in mortgage loan markets came from subprime and Alt-A
programs, which made financing available to borrowers with no
regard for proper income and asset documentation

• Lenders made loans to unqualified borrowers which resulted in
borrowers over-reaching to meet their mortgage payments
 In 2003, nearly $400 billion of these loans in the marketplace.
 Three years later, that increased 250% to $1 trillion dollars!
• When housing prices began to decline in 2005:
 Refinancing became difficult and delinquency rates increased
 An increasing number of sub-prime and Alt-A borrowers were
unwilling or unable to meet their mortgage payments
 Delinquency rates, noting 60 day+ delinquent mortgage
payments, doubled from prior to 2006 (1.1%) to 2008 (2.3%)
 Serious delinquency (90 days past due or in foreclosure) for the
subprime and Alt-A products began a steep increase from
approximately 10% in 2006 to 40% in 2010!

• The impact of these delinquencies was severe on creditors and
private investors who purchase loans through securitized vehicles
• Securitization was pioneered by government sponsored enterprises
(GSE’s), including FNMA and FHLMC
• In early 2000, Private financial institutions were created complex
mortgage-related investment vehicles through securities and
derivatives until everything ground to a halt in 2007 in the face of the
rising delinquencies on subprime and Alt-A loans. Then, in 2011:
 Approximately $1.28 trillion in mortgage loans were originated
 Approximately 93% of home purchases were financed with a
mortgage credit transaction
 Total loan volume was 6.3 million new first lien mortgages; of
these, 65% were refinance transactions and 35% were purchase
money loans. Historically, the percentages were split evenly

Ability to Repay and
Qualified Mortgage Rule Updates
• The Consumer Financial Protection Bureau (Bureau) will issue a final rule,
effective January 10, 2014, to implement laws requiring mortgage lenders
to consider consumers’ ability to repay loans before extending credit
• The rule excludes open-end credit & timeshare plans, reverse mortgages
and certain temporary loans
• In 2008, the Federal Reserve Board (Board) adopted a rule under the
Truth in Lending Act which prohibits creditors from making “higher-price
mortgage loans” without assessing consumers’ ability to repay the loans
• Under the Board’s rule, effective since October 2009, a creditor is
presumed to have complied with the ability-to-repay requirement if they
follow certain specified underwriting practices
• In the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act,
Congress required that for residential mortgages, creditors must make a
reasonable and good faith determination based on verified and
documented information that the consumer has a reasonable ability to
repay the loan according to its terms

Ability-to-Repay Determinations (1 of 2)
The final rule describes certain minimum requirements for creditors making
ability-to-repay determinations, but does not dictate that they follow
particular underwriting models. Creditors must consider eight underwriting
factors:
1. Current or reasonably expected income or assets
2. Current employment status
3. Monthly payment on the covered transaction
4. Monthly payment on any simultaneous loan
5. Monthly payment for mortgage-related obligations
6. Current debt obligations, alimony, and child support
7. Monthly debt-to-income ratio or residual income
8. Credit history
Creditors must use reliable third-party records to verify the information they
use to evaluate underwriting factors, including the consumer’s loan-related
obligations, simultaneous loans and recurring living expenses of which the
creditor was aware

Ability-to-Repay Determinations (2 of 2)
• Final rule provides that consumers indicate a subprime qualified
mortgage violation by showing that the loan was originated at a time
when the consumer’s income and debt obligations left insufficient residual
income and assets to meet living expenses, thus it was not a Qualified
Mortgage
• Two assumptions are made in application for Ability to Repay provision:
 The loan will be repaid in substantially the same monthly payment
throughout the term of the loan
 In the case of an adjustable rate mortgage, the qualifying rate is
based on the higher of the fully indexed rate or the initial start rate
• Other calculation rules are in place for loans with balloon payments,
interest-only payments, or negative amortization
The Ability to Repay provision is aimed at tightening the lax underwriting
that is believed to have fueled the housing bubble. Regulations are put in
place to protect consumers from mortgages they cannot afford by
requiring lenders to verify income and assets of the borrower with an
independent source

Features of Qualified Mortgages
• No excess upfront points and fees
• No toxic loan features
• Cap on how much income can go toward debt
• No-doc loans not eligible
• Prepayment penalties prohibited
Estimates range from 25% to more than 80% of the loans
backed by the GSE’s or other government insurers (FHA,
VA, and USDA) would meet the requirements of a qualified
mortgage under the new rules

Additional Provisions of the Rule
• The final rule provides for a second, temporary category of qualified
mortgages that have more flexible underwriting requirements but must also
satisfy the prerequisites and underwriting requirements and, therefore, be
eligible to be purchased, guaranteed, or insured by either:
 GSEs while they operate under Federal conservatorship/receivership
 The U.S. Department of HUD, Department of Veterans Affairs, or
Department of Agriculture or Rural Housing Service
• This temporary provision phases out as various agencies issue their own
qualified mortgage rules and if GSE conservatorship ends, or after 7 years
• Another provision extends the record retention requirements to
demonstrate compliance for lenders and creditors from two years to three
• In addition to the foregoing ability-to-repay provisions, the Dodd-Frank Act
established other new standards concerning a wide range of mortgage
lending practices, including compensation of mortgage originators, Federal
mortgage disclosures, and mortgage servicing

More QM Info
• http://www.newsday.com/classifieds/real-estate/mortgage-lending-rules-revision-
could-squeeze-working-class-home-buyers-1.6279591

Down Payment Assistance
http://www.arizonadownpaymentassistance.com/down-payment-programs/

Private Money
• Typically used for investment properties
– “Hard Money Lenders”
– Short term are typical
– High rates are typical
– Higher down payment is typical
– A lot of flexibility based on the investor’s
parameters

FHA Access DPA Second
“.5% Down FHA Loan”
<< About $71,200

FHA “Back to Work” Program
As a result of the recent recession many borrowers who experienced unemployment
or other severe reductions in income, were unable to make their monthly mortgage
payments, and ultimately lost their homes to a pre-foreclosure sale [short sale],
deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to
discharge or restructure their debts. Because of these recent recession-related
periods of financial difficulty, borrowers’ credit have been negatively affected. FHA
recognizes the hardships faced by these borrowers, and realizes that their credit
histories may not fully reflect their true ability to repay a mortgage.
http://lenderama.com/2013/09/23/fha-makes-economic-event-an-extenuating-
circumstance-and-its-about-time/

“Boomerang Buyers”
• FHA Loan Waiting Periods
– FHA loan after foreclosure: The waiting period for getting an FHA loan after a foreclosure is 3 years after the foreclosure.
– FHA loan after short sale: The waiting period for getting an FHA loan after a short sale can be as little as 2 years, but some
lenders may make you wait longer depending on your overall credit profile.
• VA Loan Waiting Periods
– VA loan after foreclosure: The waiting period for a VA loan after a foreclosure is 2 years for most VA lenders.
– VA loan after short sale: The waiting period for a VA loan can be as little as one month under the right circumstances. If
you have not missed any mortgage payments prior to the final short sale and you have a 660 or higher credit score, there is
a chance that you could get an automated underwriting approval and get a VA loan. Work with a loan officer who is a VA
loan expert if you are in this situation.
– If you have late payments prior to the short sale, expect most lenders to tell you that you are going to have to wait 2 years
and have no late payments on any credit account in the last 12 months prior to applying for a VA loan.
• USDA Loan Waiting Periods
– USDA loan after foreclosure: As a standard rule, many lenders will tell you that you will need to wait 3 years after a
foreclosure.
– USDA loan after short sale: The waiting period for a USDA loan after a short sale can be as little as 2 months in the right
situation. If you have had a short sale and the following conditions apply, then you could possibly get a USDA loan in as little
as 2 months after your short sale:
– Credit Score of 660 or higher
– No late payments for the past 12 months
– If you have recently sold your home and have no late payments, it is possible to qualify immediately
– Obtain a GUS Approval (This is an automated underwriting approval for a USDA Home Loan).

Credit Components
http://www.creditcards.com/credit-card-news/help/5-parts-components-fico-credit-score-6000.php

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