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Can A Felon Buy Property?

Options for housing that come by are very limited in nature after a felon gets released from prison. There are several resources available that allow felons to own a house. The article covers whether felons are eligible to buy a property in their name.

can felons buy the property

  • What are the Requirements in Buying a Property?
  • Different Types of Loans
  • Why are FHA and USDA Loans Best for Felons
  • How Do Felons Make their Buying Case Strong?
  • Course of Action

What Are The Requirements in Buying a Property?

Deciding to own a property is not simple. There are several factors when purchasing a house. Several factors influence the purchasing decision for purchasing a house. Felons must save money for down payments. Felons must focus on maximizing credit score. Getting a pre-approved mortgage is also important.

A credit score is a numerical representation for a credit report which ranges from 350 to 850. The higher the score, your credit report becomes better. Credit score facilitates felons to get a mortgage approved. A credit score helps in taking a home loan to purchase a house. Felons must ensure their credit score is excellent.

can felons buy property

A negative credit score negatively affects the opportunity to take a loan.

Felons require the following documents to purchase a house:

  • Income tax returns for the past 2 years.
  • W – 2 forms for the past 2 years.
  • Bank statements for few months
  • Proof of mortgage along with rent receipts for the last 1 year.
  • A list should be made with details of all debts which include credit cards, student loans, auto loans, and alumni.
  • List of all assets with bank statements, real estate details, investment details, and auto titles.
  • It is advised felons should not change jobs very easily when they make such huge purchases and they should keep track of all debt payments before seeking approval.

Different Types of Loans

1 Different types of loans offered are: Conventional, FHA, USDA

2 Felons receive financial support on basis of 2 kinds of loans which are FHA & USDA.

3 A Conventional Home Loan generally requires a good credit score which is at least 620.

4 Felons need to make a down payment of 20% from the total value of the house.

5 There is a special indicator in the conventional loan which is called PMI.

can felon buy property

6 PMI acts as a guarantee for the lender which assures the lender a mortgage amount will be received if the borrower fails to complete the loan requirement.

7 FHA Loans are popular loans for first-time home purchasers. They are famous because they offer low down payment schemes.

8 Felons need a minimum credit score of 580 or more to make a down payment of 3.5% to get an FHA loan approved.

9 In case the felon has a low credit score, they must focus on improving their credit score before they apply for a loan.

Requirements for FHA Loan

1 The basic requirements for FHA Loan are: proof of employment for felons for the last 2 years, credit score for 580 with a minimum down payment of 3.5% from the total value of the house, felon should not declare bankruptcy in the past 2 years or have a foreclosure in last 3 years, a felon cannot declare delinquent account or any kind of federal debt including restitution.

2 FHA approval requires the following documentation: address proof of last 2 years, felons must provide personal information such as names and addresses of all employers along with salary slips of last 2 months, income tax documents for last 2 years are essential.

can the felon buy property

3 USDA Loan helps a felon to purchase a home with zero down payment. This is a specific program available only in the USA and military veterans do not qualify.

4 USDA Home Loan charges low-interest rates.

5 USDA loans have the requirements as follows; employment proof for the past 2 years, credit score rating which is 620 or more, no bankruptcy in the last 3 years, no federal debt including restitution, a detailed background check.

6 The documentation includes the name and addresses of all employers with salary slips of 1 month, a divorce decree or a child support agreement which states sending and receiving child support, income tax forms for 2 years, and assets statements for the past month.

Why are FHA and USDA Loans Best for Felons?

1 Lenders do not conduct any background checks for cross-validating criminal history for felons.

2 Lenders obtain the credit report for felons along with proof of residency for the last 10 years.

3 Background checks for any felon depend on credit history and credit score.

4 The current employment status and identity of a person get verified.

5 Criminal history does not play any role in this kind of role.

can the felons buy property

6 Felons on their release do not have enough money to qualify for a mortgage.

7 Prison time has no source of income and felons cannot pay basic bills.

8 Felon’s families suffer financially till felons serve their sentence.

9 Felons generally have a low credit score and unstable work history.

10 They do not have a suitable job to buy a good house.

11 The only option left is FHA or USDA loans.

How Do Felons Make their Buying Case Strong?

  • Felons must focus on their goal of buying a house and be persistent with it.
  • Felons can fill a mortgage application with truthful information without fabricating any information.
  • They must avoid any kind of fraud or be dishonest in the application.
  • Felons must focus on improving their credit score and take professional education with training.
  • Felons should focus on expunging their record and getting a job.

Next Course Of Action

Felons must use a positive approach to rebuild their work history and credit score. They should never give up the dream, of purchasing a house. They must focus on buying a house with the right source of income with a substantial bank balance. Felons generally rely on family and friends for any kind of moral and financial support.

FHA and USDA are very reasonable financing options to mortgage a property that felons want to purchase. Felons should focus on doing the right things when purchasing a home. They should also look at the right property before finalizing it. It is a big decision and should not be taken in haste.

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About Eugene Casey

Eugene works in a busy employment agency in Chicago and has nearly 20 years of experience in finding clients the perfect job. His philosophy is simple, the right match for the right position is nearly always a win-win for both the employee and the company.

When he isn't working or writing for us, he enjoys cooking and exploring the United States, one state at a time.

He lives with his wife Lisa and their two German Shepherds, Wilber and Gus.

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