March 26, 2015
A reader asks, “Hello. Im a first time buyer my income its from 45 to 50g a year, as i understand i qualify base on my income and fico score. my question is, since my wife did bankruptcy last year , can i include her in the loan for ours first home?”
When answering reader questions like this, it’s important to note that state laws have a lot to say in cases where the borrower lives in a community property state. Community property laws govern how new debts are incurred once the legal marriage begins; FHA loans address mortgage loan approval rules in general, but the FHA loan rulebook does not override the law.
FHA loan rules in HUD 4155.1 state that all borrowers must credit qualify for the FHA home loan. “A credit report submitted with a loan application must contain all credit information available in the accessed repositories. Additionally, for each borrower responsible for the debt, the report must contain all of the information available in the credit repositories pertaining to
• credit
• residence history, and
• public records information.”
That is true for co-borrowers, too. A co-borrower who has filed bankruptcy is required to wait out a seasoning period before he or she can apply for another FHA home loan. This seasoning period varies depending on circumstances, the type of bankruptcy, and whether the borrower has re-established good credit and credit patterns since the bankruptcy.
In short, there’s no single answer to this reader’s question. Borrowers will need to confer with a participating FHA loan officer to see what might be possible for an FHA home loan under such circumstances.
Do you have questions about FHA loans? Ask us in the comments section.
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 www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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