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What are the Differences Between Conventional and FHA Loans and Determining who is the Best Fit Depending on the Situation?

Mar 28, 2024

These are important factors to consider when deciding between Conventional and FHA loans in Georgia. Each has its own set of guidelines and requirements, so it’s essential to choose the one that best fits your specific situation.

Unlimited amount of unpaid collections and non-mortgage charge-offs:

  • Fannie Mae only allows this on a primary single-family property.

Deferred student loan calculation:

  • Both FHA and Freddie Mac calculate deferred student loans at 0.50% of the student loan balance.

Minimum time for receipt of child support income payments

  • FHA requires 3 months of receipt with a Court Order and 12 months of history without a Court Order.

Minimum seasoning of bankruptcies (BKs) and foreclosures:

  • FHA mandates a 12-month clean history for a Chapter 13 BK (manual downgrade) and 2 years for a Chapter 7 or 11 discharge.

Omission of installment debt with 10 payments or less:

  • Conventional loans allow this without further requirements, while FHA requires the payment to not exceed 5% of the Borrower’s income or it cannot be omitted.

As a mortgage broker that specializes in its attention to the Georgia lending market, we emerge as the go-to company when it comes to financing first-time homebuyers in the state of Georgia. Contact us for more information about our loan qualifications.