Category Archives: Credit

Minnesota Housing Credits, MN Down Payment Assistance

minnesota_housing_creditsWhen you are able to receive Minnesota housing credits, consider buying your first home–or a home in general–in New Hope, MN. How about that for a name? New Hope. It would look good on your stationery, wouldn’t it?

New Hope is among Minneapolis-St. Paul’s “second-ring” suburbs, so it’s not totally city and it’s not totally rural, either. It’s suburban, and adjacent to several other communities, including

Crystal, Brooklyn Park, Plymouth and Golden Valley.

If you take Golden Valley out of the equation, New Hope’s housing stock is comparable to its neighbors, whereas the price per square foot hovers between $93 and $99. New Hope is on the high end at $99, meaning it’s quite a desirable community to live, work and/or play.

Why not use Minnesota housing credits to buy a home in New Hope? At 20,000 people, it’s not too big or too small– it’s “just right” for a place for families–and breathing room.

Originally formed as a farming community, New Hope is now a nice suburban place to call home. Located in Hennepin County, 12 miles northwest of downtown Minneapolis, you can get there on U.S. Highway 169, a main route in and out of the city.

If you have kids, they should like New Hope’s parks and recreation amenities, including the outdoor pool for summertime and the ice arena for hockey in the winter. There’s also a pickleball court, a “sk8 pad” for skateboarders, and gyms for working out.

Nearly every New Hope home is within a quarter-mile of a city park. Cool, huh? New Hope maintains 20 city parks with a total of more than 200 acres of green space. The crown jewel of the city’s park system is the 65-acre Northwood Park on Boone and 38th avenues.

New Hope is also home to privately run recreational facilities including a Lifetime Fitness and a YMCA, both located in the City Center area near Winnetka and 42nd avenues.

A family-oriented, suburban place, New Hope represents the best of American living these days. Use Minnesota housing credits to get yourself a house there; call Lake Area Mortgage today at 651-209-2900 to ask about financial assistance to “make it so!”

Minnesota mortgage first time home buyers FHA Qualification what is an underwriter looking for?

The 1st question my first time homebuyers ask is an underwriter looking at when trying to get approved for a new mortgage. The answer I always give is it’s big picture. Here are the primary points.

Credit- underwriters are looking for a minimum of a 620 credit score. Having said that they are also looking for credit quality and credit depth. How many tradelines do you have and for how long? A borrower could have a 620 credit score with 3 settled collections and $250 Macys credit card. In this instance this wouldn’t be an automatic denial, however the other aspects of their finances must be very strong. 3 years after a foreclosure or short sale, 2 years after a chapter 7 bankruptcy, and just 12 months after a Chapter 13 (with trustee permission) you can purchase a home again. BUT the underwriter will be looking at 2 things. Did you re-establish new credit and have you paid it on time? They will also be looking at the immediate previous 12 months. If in the last 12 months you were late on your car twice and accumulated 2 new utility collections an underwriter is not going to approve that loan due to previous financial catastrophe and failure to prove yourself credit worthy again.

Income/Employment- Is it consistent, stable, and likely to continue for 3 years. For employment you need a 2 year work history.Full time enrollment in secondary education does count for part of that history if your current job is full time. If your employment status is seasonal, temp worker, contractor, self employed, or part time you must have a 2 year history (no secondary education waiver) If you have bonus, overtime, or commission income that you would like to use for qualifying you must have that job for 2 years. In the case of child support, alimony, social security disability, ect you must prove stability of past receipt and proof it will continue for 3 years minimum. In the event of child support you’d prove the child’s age along with paternity court order or divorce decree  For disability income you’d provide a dr’s note indicating your disabled condition is not likely to change in the next 3 years.

Assets- As you can see there are many sources for help with down payment. The main important thing important with assets is clean bank statements. I define clean as no cash, no non payroll deposits unless a tax refund, insurance settlement, ect.  “my mom owed me some money and she paid me back” is not going to work for underwriting. When receiving down payment assistance 99% of the programs require a percentage in contribution of “your own funds” if someone paid you back, gifted, or lent you money it is not your own funds. Unfortunately stated explanations are rarely acceptable. Definitely bounced checks, NSF’s, overdrafts onto a line of credit, or regular overdrafts are acceptable. This indicates to an underwriter that you are having difficulty paying your current debts and obligations without having a home mortgage debt.

FHA VA Mortgage Disputed Tradeline Credit Accounts

Disputed Tradelines update to policy

The FHA TOTAL Mortgage Scorecard User Guide states that the loan casefile must be manually downgraded to a Refer recommendation and the loan must be reviewed by a Direct Endorsement (DE) underwriter if the borrower is disputing any credit accounts or public records. As a result, the following new message will be issued on all FHA loan casefiles to remind lenders of this requirement, but the recommendation will not be changed to a Refer due to this message:

If the credit report reveals that the borrower is disputing any credit accounts or public records, the mortgage loan application must be referred to a DE underwriter for review

See our page on disputed credit accounts.