Many future home buyers out there have car payments and credit cards that show up on their credit report that they co-signed for, but some other party makes these payments. FHA loan requirements allow a borrower to exclude the payments on any co-signed debt as long as the FHA borrower can document that this other party has been making the payments for the last 12 months. Additionally, that 3rd party has to be a co-borrower on the debt in question. So if you have a couple of car loans or credit cards that are preventing your from qualifying for a FHA home loan, and someone else is making those payments, there is a chance you can exclude those payments.
Another similar concept in getting your FHA debt-to-income ratios where they need to be, is paying off debt to qualify. You can pay off auto loans or credit cards to qualify for an FHA loan if you need to. But if you do this and the debt is still reporting to your credit, you will need to provide the zero balance statements and source where the money came to pay off the debt to the FHA home loan lender.
So I hope this helps understand different ways you can pay off debt or exclude debt to qualify for a FHA home loan in California. Don’t hesitate to email me at firstname.lastname@example.org or call at 858-922-7899 if you have an questions or would like to be approved for a FHA loan in California.
Below are some highlights of FHA home loans in California:
- FHA loan limits in California are $625,000 in San Francisco, San Jose, Los Angeles, Orange County, Anaheim, Santa Ana. FHA loan limits in San Diego are $546,250. FHA loan limits in Riverside and San Bernardino are $355,350. Sacramento FHA loan limits are $474,950. Fresno FHA loan limits are $281,750.
- FHA loan down payment of 3.5% can be a gift from a relative
- FHA loan interest rates are at ALL TIME lows
Sr. Loan Officer