I have never personally qualified for an FHA loan but the bank/mortgage company is the one doing the loan. FHA is insureing the loan. I don’t think that it would be in the best interest of the bank to appove someone with shakey credit.
The real answer is that you do not have to qualify to take over the property or the loan. So why do it. Seller wants you too? Not good enough. You can do contracts for deeds, lease options, or land trusts to probably accomplish the same thing.
Qualifying to Assume an FHA Loan? - Posted by Jim IL
Posted by Jim IL on February 22, 1999 at 22:45:34:
Hello all,
I have an opportunity to just “take over” a townhome here. The owner has an FHA assumable that requires qualification.
I don’t have a clue as to what the requirements are to assume the loan. Does anyone here know if the requirements are as stringent as obtaining a mortgage in the first place, or even more so.
Simply put, can someone with “not so good” credit assume these.
Thanks in advance,
Jim IL
P.S. Oh and yes, this is a good deal, there is a little equity in the home, and it is leased to have a positive cash flow.
Re: Qualifying to Assume an FHA Loan? - Posted by Dave T
Posted by Dave T on February 23, 1999 at 23:47:04:
Yes, qualifying to assume an FHA loan would be the same as qualifying for a new loan in your own right. To assume this loan, you will have to meet the same creditworthiness criteria as a new borrower.
I have a couple of FHA loans that have a qualifying assumption provision. However, these loan restrict assumption to an owner occupant and preclude an investor from asusming. You might check the sellers loan documents to confirm that an investor assumption is OK.
I agree with Bud, there are other avenues to acquiring this property that are available to someone with shaky credit.