Haven't rented/paid utilities for years - FHA delays?

6 Replies

hey All,

I would be a first-time home buyer (Boston area) and am considering house hacking for my first rental property in nearby Manchester, New Hampshire. I haven't paid any utility bills or formal mortgage/rent in the past year as I am living with my parents. A BP article on FHA loans (https://www.biggerpockets.com/renewsblog/2015/03/2...)  stated the following:

"not being able to demonstrate a history of payments that the vast majority of Americans are making each and every month can actually delay you significantly.

When you ask a bank for a loan, especially if you are a first time buyer applying for FHA financing, the lender will want to see the following:

  • Your credit score
  • Your income
  • A track record of consistent and significant payments

Here are some examples of payments that you’ll want to have made (consistently) for at least a year if you are looking to get financing for your first property:

Item #1. Credit card payments

Item #2. Rent or mortgage payments

Item #3. At least one instance of a utility bill like electric/water/internet

It’s really easy to check and make sure that you are paying these consistently, but it’s also easy for a lot of folks to informally pay roommates/parents/loved ones for these types of services. Make sure that your name is on any credit card, lease/mortgage, and utilities that you pay. It’s important to demonstrate that track record to your lender."

So finally, here's the questions:

1) Do I need Items #1, #2, AND #3? Or do I just need one of them?

2) If I do indeed need all 3, are payments from 2+ years ago valid or does it have to be in the most recent year?  Are they ignored if they are too far in the past (i.e. 10 years ago)?

I have a history of paying 12 consecutive months of student loans (although it wasn't the same calendar year since it started mid-2016.  Wasn't listed though so I don't know if that counts.

I have paid credit card bills for the past few years consistently, a couple thousand dollars a year. It would be great if that was sufficient.  If not....

I have paid rent, but only 2 years: 2016 (IF you count the months I subletted it for) and 2013.  I'd have to double check if my name is on all those checks though.

I have not paid any cell phone / utility bills a year (6 month comcast bill from 2016, can't find my 2013 data).

3) I'm looking to buy a property in just a couple months so this won't help now, but for the future: I currently live at home, I pay rent in cash with no lease.  Would it be smart to:  pay one of my parents utility bills (and have them reimburse me?)  And write up a lease so I am paying rent formally instead of informally?



@Amil D. You might be a good candidate for www.NACA.com.

They have a few hoops to jump through, but $0 down, no closing costs and fixed, below-market interest rates.

If you were looking south of Boston, I could help, but not north shore or NH. Maybe another agent who has signed on to work with NACA can chime in.

hi Charlie,

Thank you for the reply! Do FHA loans fall under the category of "NACA" or vice-versa? Or are they similar/used interchangeably? I have never heard of NACA before.



@Amil D.   You can get some great advise here but go right to source... call a bank you are interested in using and ask them what qualifications they need to lend to FHA.

A smaller bank can usually forward your exact situation to the underwriter (the person who actually yay or nays your loan) and get a quick vibe of whether they would lend to you or not.

Good luck - Jim

Thanks Jim, I’ll give it a try!

@Amil D. Wherever you are doing your banking go to that bank, apply for mortgage pre-approval. You have to mention on your loan application you are living rent free. 

If you pull your own credit report, you can see exactly what history will be reported to the lender.  www.annualcreditreport.com  You get 3 per year for free.  A good way to monitor for inaccuracies or identity theft.

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