How Collections & Charge‑Offs Affect an FHA Mortgage
1. Medical vs. Non‑Medical Collections Medical collections/charge‑offs: Ignored for FHA qualifying No 5% rule Only impact your credit score, not your DTI Non‑medical collections/charge‑offs: FHA requires lenders to count 5% of the balance as a monthly debt Applies whether the loan is DU, LP, or manual underwrite ✅ The 5% Rule (The Big Change) FHA does not require you to […]
