To: VHDA Originating Lenders
Date: May 12, 2015
Re: Borrowers with prior Foreclosure, Deed in Lieu of Foreclosure and Short Sale
VHDA is updating its policy regarding borrowers with prior foreclosures and providing more specific guidance for eligible exceptions.
VHDA will follow industry standards regarding waiting periods to be eligible for a VHDA loan based on the requirements noted below:
Conventional loans will follow Fannie Mae guidelines.
FHA/VA/RD will follow the agency guidelines.
(see requirements for FHA Plus/VHDA DPA loans below)
In addition the following applies to all loans:
- All borrowers must have a satisfactory credit history since the foreclosure/deed in lieu/ or short sale.
- No significant derogatory credit since the event (including bankruptcy/judgments) and no late payments (including rental history) or collections in the 3 year period prior to loan application.
- In all cases, the foreclosure/deed in lieu / short sale must be no less than 3 years old at the time of loan application.
- AUS approval is required (manual underwriting not allowed).
- Prior foreclosures/deed in lieu and short sales on prior VHDA loans will follow the same criteria as noted above.
FHA Plus or other VHDA down payment assistance will not be eligible. However, exceptions will be considered after 7 years from the date of the prior foreclosure/deed in lieu or short sale. Waivers for exception on FHA Plus loans or other VHDA down payments assistance must be submitted to VHDA for approval and must meet the requirements noted above.