The answer is yes! (As long as the penalty is included in the max allowable concessions by Seller on a VA loan).

This is great news for Homebuyers who are Veterans of the Armed Forces.

With Interest rates being as low as they are and house prices as affordable as they are compared to recent times, many Veteran homebuyers are held back just by the stiff penalties for breaking a  Rent-Lease.

The Seller can not only pay that penalty but it can be safely disclosed on the Closing Statement.

Pass on the good news!

Homebuyers and Real Estate Agents often don’t realize that FHA allows a Borrower to co-sign as the **Non Occupant** Co-Borrower on an unlimited number of FHA loans.

Really? Yes Really.

Even though, unless there are special circumstances,  (like a forced job relocation or sudden and dramatic increase in family size) a homebuyer can really only have one FHA loan at any given time, someone who doesn’t intend to occupy the property can cosign/co-borrow with the buyer(s) that *do* intend to occupy the property without such a limitation.

Better still, FHA allows the total incomes and debts of all the borrowers to be blended together to arrive at one (overall) debt ratio.

This feature has enabled many a homebuyer who couldn’t properly document all of their income for example, to qualify for a home loan when their income alone wasn’t sufficient for qualifying purposes.

So the Chief Economist at NAR (National Assoc of Realtors) predicts housing sales will increase 4% next yr (2012).  Moody’s Analytics (Celia Chen) is more ambitious, thinking a 20%+  jump in 2012. But the much-desired housing recovery will be strangled by one thing above all . . .lack of consumer (homeowner) confidence in that Recovery. You see if house prices soften in the first two quarters of 2012 as expected by many, a good chunk of homeowners will react to negative equity by “strategically defaulting”. It’s a fact that being underwater is a common trigger which causes people to bail. The default and resulting number of foreclosures kicks off a cycle of events which repeats the drop in house prices.  Default leads to foreclosures . . leads to drop in prices . . .leads to negative equity . . leads right back to more default.

If somehow Consumer confidence and faith in long term appreciation in value could hold its ground, we’d see an overall housing recovery quicker and stronger.

Only time will tell  . . .

it’s a little known fact amongst Homebuyers, Renters, Realtors and even Loan Officers that both FHA and VA allow a Borrower to purchase a home after they’ve made 12 timely payments on a Chapter 13 BK.
Wait! What? Yes you read that right.
Why is this important? It’s important because while grappling with many unpaid collections, charge off’s and judgements, a Borrower’s credit score remains low and unable to revive. This keeps them from FHA financing.
Bringing all that unpaid debt, all the dirty laundry so to speak, under the governance of the Bankruptcy Trustee forces the credit bureaus to begin reporting each of those negative accounts as “INCLUDED IN BANKRUPTCY”.
The magic is this: When a trade/account is reported in this way, the FICO (Credit) Scoring model treats the accounts as “non-rated”.
Their negative effect is diminished!
Now a smart homebuyer would couple this with obtaining maybe 2 or 3 **secured** credit cards which are virtually guaranteed, pay on them for 12 months alongside the Bankruptcy Trustee payments and . . . voila! After 12 months of filing Chapter 13 the Borrower has a better score *AND* some re-established credit.
It’s important if using this maneuver to not leave any unpaid collection/charge off outside the BK filing.
For more details on purchasing a home while in Chapter 13 Bankruptcy, contact us at 877-332-9703 or through the links on this blog site.