Fannie Mae Collection Accounts 2022

Fannie Mae Collection Accounts 2022

Credit Scores Used By Lenders Fannie Mae Collection Accounts: Introduction

To begin with Fannie Mae is a government sponsored entity who is in charge of creating and setting up the rules and guidelines for conventional loans.  Just as HUD is in charge of setting the rules and regulations for FHA Loans, every mortgage loan program has their own specific lending guidelines on collection accounts and how borrowers will qualify for mortgages accordingly.

2022 Credit Scores Used By LendersFannie Mae Collection Accounts vary from the 2022 Credit Scores Used By LendersFHA Guidelines on Collection Accounts, so if you know the FHA guidelines, you will definitely want to know the Fannie Mae guidelines since they are much more strict than FHA.

2022 Credit Scores Used By Lenders Fannie Mae Collection Accounts: Conventional Loan Requirements
2022 Credit Scores Used By Lenders Fannie Mae Collection Accounts: Conventional Loan Requirements

In order to qualify for a Conventional Loan borrowers will need to follow the requirements created by the 2 government sponsored entities, Fannie Mae and Freddie Mac.  Conventional Loans, also known as conforming loans because they need to conform to Fannie’s and Freddie’s guidelines in order to be approved.  There is a minimum credit score needed for conventional loans and that is 620 FICO.

Also, there is a 4 year waiting period after a chapter 7 bankruptcy discharge date, a 2 year waiting period after a chapter 13 bankruptcy discharge date, a 4 year waiting period after a deed-in-lieu of foreclosure, and a 7 year waiting period after a foreclosure.  For foreclosure and deed-in-lieu, the clock doesn’t start until the property has been transferred out of your name, so this could add on an additional 6-18 months of waiting before the clock even starts.

Credit Scores Used By Lenders Fannie Mae Collection Accounts: Payment History
Credit Scores Used By Lenders Fannie Mae Collection Accounts: Payment History

Just because you have a minimum credit score for a 2022 Credit Scores Used By LendersFannie Mae Collection Accounts mortgage doesn’t mean you will automatically qualify for a loan.  You must also have positive payment history for the past 12 months especially.  As a rule of thumb, if you have late payments AFTER a bankruptcy most lenders won’t even consider you for a loan.  If you have late payments that are not in collections, you must pay the past due amount to current in order to qualify for 2022 Credit Scores Used By LendersFannie Mae Collection Accounts.

Credit Scores Used By Lenders Fannie Mae Collection Accounts

With regards to 2022 Credit Scores Used By Lenders Fannie Mae Collection Accounts, conventional borrowers do not have to pay off outstanding collection accounts or charge off accounts if their goal is to purchase a 1-unit, primary owner-occupied home.  This rule is regardless of the outstanding collection account or charge off account balance.  If the borrower is looking to purchase 2-4 unit residential property then the borrower must pay off any outstanding collection accounts if the outstanding balance is $5,000 or greater prior to closing on the home.

Finally, if you are looking to purchase an investment property, all collection accounts over $1,000 must be paid off prior to the closing of the residence.  As you can see, for a 2022 Credit Scores Used By LendersFannie Mae Collection Accounts loan, there is still ways for you to purchase a home with also having collection accounts on your credit report and history.  Before you do anything prematurely, it is wise to work with a professional like myself on who can guide you in ensuring you don’t pay off anything more than you absolutely have to.

If you have collection accounts, pick up the phone and give me a call to get your loan pre-approval process started at 888-900-1020, email me at contact@loanconsultants.org

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