Currently, FHA requires a waiting period of two years in bankruptcy cases and three years after a foreclosure or short sale before a borrower can apply for an FHA loan.
According to a new letter obtained by Inside Mortgage Finance, HUD says it is uncertain whether any new loan created under the controversial eminent domain plan would qualify for FHA insurance.
The guidance, effective October 15, applies to manually underwritten FHA loans and requires lenders to document reasons for approving a mortgage when the borrower has collection accounts or judgments.
According to the Department of Housing and Urban Development, FHA has nearly exhausted its $25 billion authority for FY 2013 to insure multifamily, risk share and health care programs.