FHA is making it easier to qualify for an FHA-insured mortgage. Earlier this year, FHA had established a rule regarding collections that was going to be effective on July 1, 2012. If you had more than $1000 in collections or disputed items, they had to be paid off.
It didn't matter why the items were in collection or dispute – FHA was going to require that they were paid in full or have started a payment plan. In the past collections were not required to be paid, especially if they were medical collections.
On June 15th, FHA came out and withdrew the new ruling. This change is expected to help many FHA borrowers qualify for a mortgage. FHA mortgages are often the best option for first time homebuyers and this would have made it much more difficult for many to buy their first home.
If you are self employed and using a FHA mortgage, you will need a profit and loss statement along with a balance sheet if more than a calendar quarter has elapsed since your tax returns were filed. If you are using more than a two year average in income, you will need audited profit and loss statements.
Leslie Vanderwerf, NMLS ID#335509, Summit Mortgage - Email – Website
