Issue: Q&A - August 25, 2016

Medical Collection: How does the USDA view a medical collection?

Answer: USDA will ask the lender to decide whether a collection should be paid off in order to qualify for a loan. Here is the regulation for your reference. Note the area I have highlighted in Red. My personal experience is that a medical collection doesn’t necessarily kill your deal. Things happen, so I recommend […]

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New Construction-Flood Insurance: If a property is in a flood zone and the builder adjusted the foundation to prevent flooding, can you still use Rural Development financing?

Download USDA RD Flood Insurance Requirements. Answer: USDA does not typically allow financing for homes that need flood insurance. However, there are some exceptions, so contact me! Yes, it is possible, even though USDA does not typically allow financing for homes that need flood insurance. The property will need flood insurance (although it is a […]

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Seasoning Requirement for IRRRLs: What is the waiting period before a borrower can do a VA IRRRL?

Answer: VA has no seasoning requirement for IRRRLs; however, most investors have a 6-month overlay in place for QM reasons and to satisfy safe harbor requirements. Copyright – 2016 – MortgageCurrentcy.com  

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HELOC-Charge Off: How does VA handle charged-off HELOC from a Foreclosure?

Answer: VA has no specific requirements for this situation or for the treatment of a charge off. VA’s most stringent requirement for a derogatory credit wait period is 2 years, so if the charge off is older than that you should be fine. Copyright – 2016 – MortgageCurrentcy.com  

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Gaps in Employment: What are the requirements for gaps in employment?

Answer: Six months of work history is acceptable if the guideline below can be met. The current employment history will be acceptable if your borrower can meet the requirements of the guideline below and provide an explanation for the extended absence. Reference: 4000.1, II, A, 4, c, xi (B) Addressing Gaps in Employment: For Borrowers […]

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