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The Federal Housing Administration, also known by many as FHA, has just announced 2017 FHA GUIDELINES ON COLLECTION ACCOUNTS.  Under the 2017 FHA GUIDELINES ON COLLECTION ACCOUNTS, there are two categories HUD classifies collection accounts.  Medical collection accounts are treated differently than non-medical collection accounts.  Medical collection accounts does not count and you can have outstanding medical collection accounts, no matter how much the medical unpaid collection is.  With non-medical collection accounts, zero balance collection accounts and charge offs do not matter.  However, if the aggregate amount of unpaid collection accounts is greater than $1,000, then 5% of the unpaid collection balance will be taken into account as monthly debt and calculated in the debt to income ratios by the mortgage loan underwriter.  This can be a problem for those with large unpaid collection balances.  The good news is that FHA will allow a written payment agreement with the collection agency and as soon as a payment agreement is signed and dated by both parties, then the new monthly payment agreement will go into effect with no seasoning requirements.  Here is an article I have written and published on http://www.gustancho.com about FHA and FHA Guidelines on collection accounts.


Very informative information. Thank you
Excellent information. Thank you.
2017 FHA GUIDELINES for outstanding collections and charge off accounts have not changed.  2017 FHA GUIDELINES on collection accounts and charge off accounts state that FHA Borrowers can still qualify for FHA LOANS without the need to pay off outstanding collections and charge off accounts with a minimum of a 580 FICO credit score. Most lenders will ask for a 620 FICO credit score and have you pay outstanding collection account balances and charge off accounts for you to qualify for a FHA LOAN. This again is due to FHA lender overlays by the individual lender and not 2017 FHA REQUIREMENTS by HUD. HUD is the parent of the Federal Housing Administration or FHA. The Gustan Cho Team at Nationwide Mortgage does not have lender overlays on FHA Loans, VA LOANS, USDA LOANS, and Conventional Loans. Over 75% of borrowers of Nationwide are borrowers who have either gotten denied by other mortgage lenders or are going through a stressful process by their current lenders. If you are going through a stressful loan process with your lender, contact Gustan Cho NMLS 873293 at 262 878 1065 or text Gustan Cho NMLS 873293 on his cell at 262 716 8151.

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