Your loan approval depends 100% on the documentation that you provide at the time of application. You will need to give accurate information on:

Employment

• W-2 & 1099 Statements for past 2-years
• Pay-Check Stubs for past 2-months

Checking & Savings

• Complete bank statements for all accounts for past 2-months
• Recent account statements for retirement, 401k, Mutual Funds, Money Market, Stocks, etc.

Personal

• Drivers License
• Any Divorce, Palimony or Alimony or Child Support papers
• Green Card or Work Permit if applicable

Refinancing or Own Rental Property

• Note & Deed from any Current Loan
• Property Tax Bill
• Hazard Homeowners Insurance Policy
• A Payment Coupon for Current Mortgage
• Rental Agreements for a Multi-Unit Property

The main difference between a FHA Loan and a Conventional Home Loan is that the credit qualifying criteria for a borrower is not as strict. This allows those without a credit history, or with minor credit problems to buy a home. FHA requires a reasonable explanation of any derogatory items, but will use common sense credit underwriting. Some borrowers, with extenuating circumstances surrounding bankruptcy discharged 3-years ago, can work around past credit problems. However, conventional financing relies heavily upon credit scoring, a rating given by a credit bureau such as Experian, Trans-Union or Equifax. If your score is below the minimum standard, you may not qualify.

Your monthly costs should not exceed 50% of your gross monthly income for a FHA Loan. This includes your mortgage payment, auto loans, credit cards, student debt, etc.

FHA Loan ratios are more lenient than a typical conventional loan.

Yes, generally a bankruptcy won’t preclude a borrower from obtaining a FHA Loan. Ideally, a borrower should have re-established their credit with a minimum of two credit accounts such as a car loan, or credit card. Then wait two years since the discharge of a Chapter 7 bankruptcy, or have a minimum of one year of repayment for a Chapter 13 (the borrower must seek the permission of the courts). Also, the borrower should not have any credit issues like late payments, collections, or credit charge-offs since the bankruptcy. Special exceptions can be made if a borrower has suffered through extenuating circumstances like surviving a serious medical condition, and had to declare bankruptcy because the high medical bills couldn't be paid.