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Lawrence Kansas Mortgages Guidelines Buy & Bail

Mortgage and Lending with First Assured Mortgage

To address increasing occurrences of the practice known as "buy and bail," FHA has issued Mortgagee Letter 08-25- Converting Existing Homes to Rentals- underwriting instructions.  FHA is instituting the following requirements for borrowers who purchase a new primary residence without selling their existing primary residence.  The term "buy and bail" refers to a developing trend where borrowers purchase a new primary residence either closer to their employment or in close proximity to their existing primary residence.  Once the new mortgage is closed, the borrower stops making mortgage payments on the original primary residence and allows the lender to foreclose.


Effective for loans with case numbers assigned on or after September 19.2008 and are temporary measures being implemented until FHA determines what, if an permanent action is required:

  1. All borrowers must fully qualify with both mortgages payments , and no rental income may be used for the property being vacated.
  2. in addition to #1 above, most lenders are requiring 12 months reserves - based on the PITI of the property being retained or 6 months PITI combined on both properties.


Exceptions could be relocation with a new employer or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance, rental income from the property being vacated may be used. The other exception is when the LTV of the property being vacated is 75% or less, rental income may be used.  


Folks, understand that things are changing, stay on top of the changes, if a client needs to sell there current home before entering into a new purchase, then get it sold first. Changes in the mortgage guidelines are the name of the game.  Check with your lender, and make sure you have the most current information.




Bob Buchanan


First Assured Mortgage



Contact First Assured Mortgage

Website URL:



Office Phone:

(785) 856-5626 Ext.: 111

Cell Phone:

(785) 979-1073

Alt. Phone:

(866) 754-5311

Fax Number:

(785) 856-7283


4830 Bob Billings Parkway Suite 100A , Lawrence, KS, 66049


Full service lender Residential and Commercial


1690 Points



About Us


With 7 years of experience working with Realtors, Investors, and most importantly BUYERS.  The client always comes first.  As a Broker, I can provide the best rates, and fair closing cost.  My GFE's usually are spot on, and never are to be exceeded without written notice to the buyer usually weeks in advance of closing.

My follow up with my clients and co marketing plans are welcomed by all my referral partners.

My rates can change by the hour because I have direct real time bond market information all day long.

Because I offer a free float down services when the markets change, my clients can expect the lowest rates, even after a lock is established.

 My staff is fully licenced and highly trained to support my demanding requirments to provide excellent customer experiences.

Areas of Expertise

First time home buyer classes held monthly my office.  FHA, VA, USDA, Fannie Mae, Freddie Mac conforming, and Commercial lending with 30 yr fixed terms.

Member of KAMB.  Completed education in Fair Credit and Credit Scoring.  Fraud detection, Guaranteed Rural Housing Programs.

Served two years on the Lawrence Board of Realtors committee's:   Education (2 yrs) and Community Relations (2 yrs)


" Just wanted to take a minute during this crazy busy time of the year to wish you two a Merry Christmas and Happy holidays.  Thank you both so much for taking time out to teach me and explain so much stuff, being forthcomming, and honest, ans so very kind. You guys have made a difference in my life, THANK YOU! Reagan W. A Lawrence Homes for Sale buyer.

"We wanted to think you for doing such a wonderful job w/ our whole closing process. Thanks for answering ALL of our question. You made everything go very snooth" N&B a Lawrence Homes for Sale Buyer.

"Thanks again for saving us SOOOO much money" LD A Lawrence Homes for Sale Buyer

" Thanks for your due diligance and hosesty and integrity, it nees to be recoginized, We love our new home. KE A Lawrence Homes for Sale Buyer.