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I have a clear to close with conditions. One of the conditions that I am concerned with is that I have student loan that is in default but I am presenty in a rehabilitation program that the US Dept. of Ed. approved. I sent the documentation to the Underwriter. I also looked at the HUD 4155.1 and it says that if a satisfactory repayment plan is made between the borrower and the federal agency and verified in writing that it will meet the FHA guidelines. God I hope so.

smithsussane · Posted: Thu Nov 27, 2008 12:23 am Post subject:

Hi freygreer!

Welcome to forums!

Yes, according to the HUD guidelines, if you have taken a satisfactory repayment plan and verified it in writing, you will meet the FHA guidelines. As you have taken the rehabilitation program approved by the US Department of Education, you can apply for FHA loans.

Feel free to ask if you have further queries.

Sussane

banker0679 · Posted: Sat Nov 29, 2008 1:10 pm Post subject:

Hi fregreer, and welcome to Mortgagefit!

It's also up to the Underwriter to accept your loan. They can deny it if you have other factors that will make them feel uncomfortable approving it. They may also approve it if you have compensating factors like a low debt to income ratio, lots of assets or reserves, large downpayment, etc.

they also may require you to have already made some payments or repayments to the student loan.

thanks
Robert

carlpruitt · Posted: Sat Nov 29, 2008 10:17 pm Post subject:

You are more than likely going to have no problem if you have made payments already on the rehabilitation program.

If your entry into the rehabilitation program is very recent, the underwriter is going to look for other compensating factors before accepting it. Unfortunately, too many people in the past set up payment programs just long enough to get a home loan and then quit paying as soon as they move in. This has made lenders wary of newly negotiated payment arrangements.

If you have good credit and acceptable debt ratios otherwise, you will most likely get your approval.

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