The Federal Housing Administration rescinded a rule that would have denied financing to potential homebuyers with ongoing credit disputes of more than $1,000, according to an alert sent to lenders Friday.
The FHA quietly drafted the rule in March to mitigate risks to its emergency fund. The rule went into effect April 1. Borrowers had to either pay off the outstanding balance on collections accounts or document an arrangement to pay before the mortgage was approved.
Industry experts pushed back, particularly homebuilders and lenders with much of their business tied to first-time homebuyers.
Read more on this story at HousingWire.