Credit Counseling Program and FHA Home Loans in California

At ABLEnding we get a lot of phone calls and questions related to credit score and credit counseling. Some people are concerned that if they have been through credit counseling they may not be able to qualify for a California FHA home loan. Before making any assumptions it is best to contact a mortgage professional that has helped hundreds when it comes to FHA home loans.

Below you will find the official information from the FHA in terms of credit counseling in the state of California.

Participating in a consumer credit counseling program does not disqualify a borrower from obtaining an FHA insured mortgage. For manually underwritten loans the lender must document that:

• one year of the pay-out period has elapsed under the plan;
• the borrower’s payment performance has been satisfactory and all required payments have been made on time; and
• the borrower has received written permission from the counseling agency to enter into the mortgage transaction.

When processing an application through TOTAL Scorecard, participation in a consumer credit counseling program does not require a downgrade to manual underwriting and no explanation or other documentation is needed.

For additional information see Handbook 4000.1 II.A.4.b.iii.(J); II.A.5.a.iii.(K) available at

http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh

As you can see, if you have participated in credit counseling it does not disqualify you from obtaining an FHA insured mortgage in the state of California. If your credit has not been great and you have a low or bad credit score contact ABLEnding today. We can help you find the right mortgage product for your current situation. Do not feel as if a few high interest rate credit cards will disqualify you from getting into the home of your dreams.

Throughout the state of California the housing market is hot. That said, there are plenty of sellers that will be willing to work with you on a price. Allow ABLEnding to do the financing while you negotiate the price for the house of your dreams. You may want to check out current California mortgage rates to know what interest you will be paying for the next 30 or so years.