USDA after BK & FHA Foreclosure?

[mom2three09]

I have been in contact with my local USDA office today (via email) and have not been able to get a straight answer on this question. We currently have a FHA loan that was IIB in 2009 ... we're going to ask for a mod and if we do not get one we are likely going to walk away from our house. We know if we do let it foreclose that we won't be allowed another FHA loan, but does that also go for USDA since they are also a government program?

This is the response I received today from the head of our local USDA office:

So am I too assume that this means it would be a no-go on a USDA loan if we allow our FHA loan to go in foreclosure? I'm not sure if our loan would be considered a "bad debt" since it was IIB

[StartingOver08]

iib means included in bankruptcy. That is a bad debt. Their answer is clear, right now you would not be able to qualify for a USDA loan either. No one knows what the regulations will be 36 months from now, but don't hold your breath.

[mom2three09]

iib means included in bankruptcy. That is a bad debt. Their answer is clear, right now you would not be able to qualify for a USDA loan either. No one knows what the regulations will be 36 months from now, but don't hold your breath.

Thank you, but maybe I'm not being clear enough in my question. I understand that right now we could not be approved for a USDA loan. But my question is, at the 36 month post-BK mark could we still get a USDA loan if we allow our current FHA loan to go into foreclosure. The local person I spoke with at the USDA office yesterday already clearly stated they will not do a USDA loan before the 36 month mark --- but that's not my question --- I just need to know whether or not we will be disqualified for USDA if we should choose to walk away from our FHA loan that was IIB. Since they are both government loans....

[StartingOver08]

No, you defaulted on a federal debt. You would not be able to get a USDA loan if you allow your FHA loan to go into foreclosure.

[mom2three09]

No, you defaulted on a federal debt. You would not be able to get a USDA loan if you allow your FHA loan to go into foreclosure.

I was afraid of that

[mom2three09]

No, you defaulted on a federal debt. You would not be able to get a USDA loan if you allow your FHA loan to go into foreclosure.

I just wanted to update this and let everyone know that I just spoke with a local lender and also FHA and was told that we must wait 3 years post foreclosure, but that we CAN get another FHA loan even after foreclosing on a FHA mortgage.

[liverichly]

I just wanted to update this and let everyone know that I just spoke with a local lender and also FHA and was told that we must wait 3 years post foreclosure, but that we CAN get another FHA loan even after foreclosing on a FHA mortgage.

Correct, however it is 3 years from the date the claim was filed to the previous lender. So this may be after the actual event of foreclosure. With all USDA & FHA loans a borrower is run through CAIVRS to determine the date of the claim. Checking CAIVRS is free, it just requires a name & social security number, so I'd suggest about 4-6 months after the foreclosure to call up a lender and ask if they can check your information on CAIVRS for you, as that will give you the time line on when you can qualify for a new FHA mortgage.

[mom2three09]

Correct, however it is 3 years from the date the claim was filed to the previous lender. So this may be after the actual event of foreclosure. With all USDA & FHA loans a borrower is run through CAIVRS to determine the date of the claim. Checking CAIVRS is free, it just requires a name & social security number, so I'd suggest about 4-6 months after the foreclosure to call up a lender and ask if they can check your information on CAIVRS for you, as that will give you the time line on when you can qualify for a new FHA mortgage.

Thanks. I'm not really concerned about how long we must wait after the foreclosure before we're able to qualify for a new FHA or USDA loan -- I was simply updating because I was told on this site that we would NOT qualify for a new FHA loan if we default on our current FHA loan. I don't want other people to be given the same bad advice I was given ;)