December 2, 2021

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FHA Loan Reader Questions: Old Foreclosures


A reader asks, “Is a person eligible for an FHA loan if they had one 20 years ago that went into foreclosure?”

FHA loan rules address the issue of past foreclosures on FHA home loans in HUD 4155.1, Chapter Four Section A. It states:

“If the borrower has had past delinquencies or has defaulted on an FHA- insured loan, there is a three-year waiting period before he/she can regain eligibility for another FHA-insured mortgage.”

Additionally, “The three-year waiting period begins when FHA pays the initial claim to the lender. This includes deed-in-lieu of foreclosure, as well as judicial and other forms of foreclosures. Lenders should contact the Homeownership Center (HOC) having jurisdiction over the area where the property subject to default is located for information such as the

• date the claim was paid, and

• date of the initial default.”

In the case of this reader question, the mandatory waiting period has long since passed and there should be no problem (based on the criteria mentioned here alone) applying for a new loan. However, the borrower’s current financial qualifications will be reviewed and the loan would be approved or denied based on these qualifications.

The FHA rules in Chapter Four also add this instruction to the lender–borrowers should be aware of it. “Although a borrower’s eligibility for an FHA-insured mortgage may be established by performing the actions described previously in this topic, the overall analysis of the borrower’s creditworthiness must

• consider a borrower’s previous failure to make payments to the Federal agency in the agreed-to manner, and

• document the lender’s analysis as to how the previous failure does not represent a risk of mortgage default.”

Borrowers should know that if there are outstanding debts or unresolved financial issues as a result of a foreclosure, those could affect the FHA loan application. In the planning stages for an FHA home loan, it’s advisable to investigate circumstances such as the one described in the reader question to make sure there are no unpaid debts or other unresolved issues connected to the foreclosure.

Borrowers should contact the FHA directly for assistance in these matters by calling 1-800 CALL FHA or contact the original lender on the mortgage that was foreclosed upon where possible.

Do you have questions about FHA home loans? Ask us in the comments section.

Joe Wallace - Staff Writer

By Joe Wallace

September 18, 2013

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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