A buyer recently called and asked about a home on our website. We discussed the features of the home, the amenities in the subdivision, the schools and the local area. He seemed quite please that home and area would fulfill his needs.
After further discussion, he stated that currently he is in Chapter 13 Bankruptcy and asked how this would impact his ability to make application for a FHA Home Loan and possibly be approved? The answer to this question depends on his capacity to satisfy the FHA guidelines for individuals in bankruptcy. He would need to meet the following guidelines:
1. The buyer must be in the Chapter 13 for 12 months
2. All payments must be on time
3. The buyer would have to obtain permission from the Trustee
4. The buyer must write a letter of explanation as to why he wants to make the purchase
FHA also allows a person in a Debt Management program to submit an application following the same guidelines above. The exception is instead of a Trustee’s permission the individual must obtain approval for a Debt Counselor.
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