Hey all, I'm in the process of trying to purchase a new home and we were told by the seller and seller's agent that they had a confirmed assumable FHA loan which seemed like a great deal to get a 4.25% rate. Fast forward, I was able to get the funds together to cover the delta between sale price and the current loan amount, we went under contract and I emailed the bank to inquire about an assumption packet to start my application process (I was already pre-approved for a larger conventional loan, have a low DTI and credit score over 820, so was not worried about getting approved).
We received this email back from the bank saying the loan didn't meet eligibility requirements because the account has been past due in the past 12 months. I have yet to apply or provide any financial info to the bank, but it seems strange that a loan owner wouldn't want to allow someone in better financial standing to take over a loan that has had past due payments. Email is below for more details. Any help is greatly appreciated. Are they just shrugging us off or is this a real requirement? I haven't found any eligibility info online other than that FHA loans should always be assumable as long as the assuming borrower is creditworthy. " Hello,
Thank you for contacting us about an Assumption of Mortgage request on the above referenced property.
You were evaluated for an assumption based upon the eligibility requirements of NewRez LLC, the owner of your mortgage loan.
Based on our review of your loan, you are not eligible for an assumption due to the following reason(s):
☐ The account is past due or has been past due within the past 12 months.
If you would like to reapply for an assumption, please know that twelve (12) consecutive months of on-time payments are needed to begin the assumption process.
Although we are not able to currently approve the assumption request, please contact our Loss Mitigation department for additional options that are available to you. Phone: 866-825-2174 Email: lossmitigation@newrez.com While we are not able to approve you for an assumption, we offer a wide selection of loan products, supported by a loan process that blends both human interaction and our expertise with the benefits of technology to create an unparalleled customer experience.
Industry-leading options for conventional, FHA, VA, and USDA loans:
Cash-out refinance New or second home purchase Fixed and adjustable rates Specialized products for Jumbo and Construction loans, self-employed borrowers, and many more!
Should you have any additional questions or concerns, please contact our Customer Service Department at 800-365-7107, Monday through Friday, 9 a.m. to 6 p.m. EST. "
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source https://www.reddit.com/r/RealEstate/comments/187cf7r/fha_loan_assumption_eligibility/
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