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Exception for obtaining a 2nd FHA loan?

1.  I am currently in an FHA loan, and am looking to move into a larger house.  We could be looking at an elderly relative moving in with us and our current home would not work.  Its not big enough and we would need another bedroom on the first floor.  My current FHA loan is only 1 year and 3 months old and I can't sell the existing house quite yet.  I plan to rent it out, but my debt to income is within accepted parameters without the rental income anyway.  I just need to see if this would be enough of an exception to get me approved as I am only 5 1/2 years out of a foreclosure.  If not, then,   

2.  As  I understand it, a conventional is not possible for seven years after a foreclosure, even though there were extinuating circumstances (i.e. sickness and death) that lead to the foreclosure five & a half years ago.  Are exceptions ever made on a conventional, or do you have to be at least seven years out.  I had moved back home from living in another state b/c my father had gotten ill and eventually passed away.  I paid on the mortgage for ten months before I ran out of $$ and started bankcruptcy.  Its not like I was irresponsible, I moved over 1000 miles to be with an ailing parent and couldnt sell my house.  Am I still stuck for another one  & 1/2 years?
  • April 06 2012 - Columbus
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Answers (1)

I believe that Fannie Mae will allow you to purchase a home once you are 5 years out from Foreclosure (date the foreclosure sale was completed) as long as you are putting down 10% or more and you have a 680 credit score or higher.

Individual lenders/banks may have stricter guidelines.  I would suggest calling around to a few places and inquiring about their foreclosure seasoning guidelines.

As far as the exception for the FHA loan, I have yet (in my 10 years) seen FHA grant an exception to allow a homeowner to have 2 FHA mortgages, even though they allow it in their guidelines.

Good luck.
  • April 15 2012
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