“Interpretation of New FHA Guidelines Create Lots of Problems Already”
To say that FHA wants to restrict lending would be an understatement. So, all of the BS about guidelines being loosened up is just that. Here is an example of someone that can now NOT buy a home.
My client is a teacher who is a single parent with $201,000 in student loan debt. She is currently involved with a Federal program that the loan is paid back based on a percentage of her income and each year the income is reviewed and a new payment is assessed and that will be a payment for that year. This renewal happens only once a year and if not renewed the payment goes to a much higher level.
The way that it was explained to me is that after the 20 years, the remaining debt goes away. This client wants to buy a $100,000 house, with 3.5% down and will have a mortgage payment of $874. Currently her rental payment is $200 higher so the purchase would be a good choice for this client.
Here is the problem, even though her payment is $156 it is due to expire in July of 2016. Under the new guideline I need to use 2% of the debt, which means a payment of over $4000 per month even though her current payment is $156 and the following July she will still have a payment under $200 based on a modest expected increase in income.
I have shared this problem with a dozen lenders and each has said I have to use $4,000 not the $156. Whoever created these guidelines does not have a clue about reality.
Two lenders have said they will see if they can get an exception, if they get documentation that this Federal program will continue. I am not sure if it is possible.
Do you think this is fair?
Image courtesy of stuartmiles/freedigitalphotos.net
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Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
Cell: 860 836-9294
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