FHA loans do not allow default on a Federal Loan.What if I pay off the loan prior to applying for FHA mortgage?

Posted on Aug 30, 2012 in FHA Information

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But the majority of Washington Mutual problem loans were prime mortgages and home equity loans. Grind reports that 70% of the options ARM mortgages and 90% of the home equity loans were taken on the basis of “stated income” instead of …
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Question by vixxen: FHA loans do not allow default on a Federal Loan.What if I pay off the loan prior to applying for FHA mortgage?
Will I get the loan? I have about 10% down…

Best answer:

Answer by Jay C
First of all, decease if you have a previous foreclosure(does not matter if it is FHA/VA/Conventional), information pills you MUST wait 3 years before you are eligible to apply for another FHA loan. This is the critera from the FHA itself. So if it has not been 3 years, I’m afraid you are not eligible for an FHA.

Secondly, if it has been 3 years since the foreclosure, and if you HAVE perfect credit since, you may be APPROVED for another FHA. HOWEVER, FHA will TYPICALLY REQUIRE that any outstanding collection accounts be paid BEFORE being able to close on the loan. So whatever amount is showing on any collection(including your foreclosure), must still be paid before you can close.

I wish I had better news for you but unfortunately this is the criteria for an FHA

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