It seems as if almost everyone you meet has experienced the negative effects of the “Great Recession.” If you or someone you know has had a derogatory credit event, check this cheat sheet, to help you determine when you can buy again. Lenders have loosened the requirements and restrictions surrounding a negative credit event. It may be time to buy before interest rates rise in 2015.

Loan type

Conventional

Max Loan Amount: $417,000

Occupancy and Minimum Down Payment: Primary Residence — 5 percent (w/660 FICO); Second Home — 10 percent; Investor — 20 percent.

Allowed Seller Contributions: Primary Residence — 6 percent; Second Home. — 6 percent; Investor — 2 percent.

Mortgage Insurance: Monthly or Single up front premium.

Maximum Debt to Income ratio: 45 percent (up to 50 percent with strong compensating factors).

Credit Score: Primary Residence — 660 FICO (with 5 percent down); Second Home — 660 FICO; Investor — 620 FICO.

Guidelines:

• Any amount can be gifted (if not an investment).

• 90-day flip is OK with a strong appraisal.

• Minimum down payment contingent on credit.

• Up to 10 financed properties (restrictions apply).

HomePath

(Fannie Mae REO)

Max Loan Amount: $417,000

Occupancy and Minimum Down Payment: Primary Residence — 5 percent; Second Home — 10 percent; Investor — 15 percent.

Allowed Seller Contributions; Primary Residence — 6 percent; Second Home — 6 percent; Investor — 2 percent.

Mortgage Insurance: None

Maximum Debt to Income ratio: 45 percent (up to 50 percent with strong compensating factors).

Credit Score: 660 FICO

Guidelines:

• Property must be HomePath eligible (Fannie Mae REO).

• No PMI and no appraisal.

• Down payment can be fully gifted except for investments.

FHA

Max Loan Amount: $217,050

Occupancy and Minimum Down Payment: 3.5 percent.

Allowed Seller Contributions: Up to 6 percent.

Mortgage Insurance: 1.75 percent upfront; 1.35 percent yearly

Maximum Debt to Income ratio: 55 percent.

Credit Score: 620 FICO

Guidelines:

• Co-signer allowed to strengthen loan.

• 90-day flip allowed with two appraisals and home inspection.

• Home improvements allowed for 203K loan.

VA

Max Loan Amount: $417,000

Occupancy and Minimum Down Payment: 0 percent.

Allowed Seller Contributions: Up to 4 percent.

Mortgage Insurance: first use 2.15 percent upfront; Subsequent use 3.3 percent up front.

Maximum Debt to Income ratio: 45 percent (up to 55 percent with residual income).

Credit Score: 620 FICO

Guidelines:

• No minimum cash investment required.

• Limited closing costs.

• Flexible credit solutions.

USDA

Max Loan Amount: $417,000

Occupancy and Minimum Down Payment: 0 percent.

Allowed Seller Contributions: Up to 4 percent.

Mortgage Insurance: Guarantee Fee; 2 percent up front and .3 percent yearly.

Maximum Debt to Income ratio: 41 percent (higher with strong compensating factors).

Credit Score: 640 FICO

Guidelines:

• Program is currently funded.

• Upfront guarantee fee can be financed.

• Maximum income limit of 115 percent of area median income.

These are basic guidelines of a specific lender. Other lenders’ policies or requirements may be different.

• Ahwatukee resident Stacey Lykins, MBA, is a Realtor with Ahwatukee-based West USA. Reach her at (602) 616-9971, S.Lykins@LykinsProperties.com or www.LykinsProperties.com.

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