I thought I would write a quick post to give you some insight into the process of fha loans and what the underwriter needs to approve them.

One of the issues that will come up is items you may have on your credit report. The government insured loan will require government approval. They do not care about most of the bad items, even if you have multiple ones. Additionally, medical items are understood. Everyone has medical issues.

One item they care about is past utilities, especially if they are big. They will single out one bad item and require to either pay it off, or get a payment arrangement and MAKE SURE you get a letterhead from the collector/utility company that says you are making payments with them and they agreed to it.

Additionally, keep in mind that fha is a 98% loan. That’s their max. So you will need to come out of pocket with the 2% at closing. On top of that you will have homeowners insurance out of pocket.

If the fha appraiser says everything is good then you are in the clear to move ahead to closing. Just watch out for those issues that come up in underwriting.