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Financing in Broomfield : Real Estate Advice

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  • Local Info3
  • Home Buying16
  • Home Selling4
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Activity 2
Thu Oct 8, 2015
Sally Grenier answered:
What is your question exactly? To get any sort of loan, you have to qualify for it. This means showing a decent credit score, stable income, decent debt to income ratios, etc. Just because she gave you her home, doesn't necessarily mean you automatically can get a loan for remodeling. I would check with some local banks or credit unions for a home equity line of credit (HELOC). ... more
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Wed Jan 8, 2014
Robert Hanson answered:
To alleviate any "confusion" for anyone that may be "confused" by conflicting information:

Once you are discharged from a Chapter 13 bankruptcy (this usually occurs within a month or two after you have made your final payment) FHA generally requires a 2 year waiting period for financing. Exceptions can be made for less than 2 years with either a downgrade to manual underwrite OR for borrowers that may qualify for the "Back to Work" program. Below I will post directly from the FHA underwriting manual Section 4155.14C.2h and HUD Mortgagee letter 2013-26. I sincerely apologize if any lack of detail on my part caused "confusion" for anybody!


A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an
FHA-insured mortgage, provided that the lender documents that
· one year of the pay-out period under the bankruptcy has elapsed
· the borrower’s payment performance has been satisfactory and all required
payments have been made on time, and
· the borrower has received written permission from bankruptcy court to enter
into the mortgage transaction.

TOTAL Scorecard Accept/Approve Recommendation
Lender documentation must show two years from the discharge date of a
Chapter 13 bankruptcy. If the Chapter 13 bankruptcy has not been discharged
for a minimum period of two years, the loan must be downgraded to a Refer
and evaluated by a Direct Endorsement (DE) underwriter.

Back to Work program excerpt from Letter 2013-26

To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that:
 Certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control;
ï‚· the borrower has demonstrated full recovery from the event; and,
ï‚· the borrower has completed housing counseling.

An Economic Event is any occurrence beyond the borrower’s control that results in Loss of Employment, Loss of Income, or a combination of both, which causes a reduction in the borrower’s Household Income of twenty (20) percent or more for a period of at least six (6) months.
The Onset of an Economic Event is the month of Loss of Employment/Income.
Recovery from an Economic Event is the re-establishment of Satisfactory Credit (as defined on page 5 of this ML) for a minimum of twelve (12) months.
... more
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