Under the new guidelines, however, no FHA loan will be approved for any dispute over $1,000. Amounts less than $1,000 shouldn’t impact loan approval unless it was ordered by a court, in which case any amount must be paid in full. This change will be effective April 1, 2012.
If a potential buyer has a $1,000-plus credit dispute on file, he or she must either pay the debt before FHA loan approval, or enter into a repayment agreement and make at least three months of on-time payments.
FHA says the change will protect the program and bolster its emergency fund that has fallen below the amount mandated by Congress.
The new rule can be found in HUD Mortgagee Letter 2012-3.
