loan limits for FHA. On April 1, 2012, the FHA enacted a new rule that requires their customers to settle with medical creditors in order to get a mortgage loan. This controversial change was rescinded and postponed until July 2012, but was later cancelled altogether pending clarification and additional guidance. By November 2012, the FHA was essentially bankrupt. FHA Loan Application Process The FHA does not make loans. Rather, it insures loans made by private lenders. The first step in obtaining an FHA loan is to contact several lenders and/or mortgage brokers and ask them if they are FHA-Approved by the U.S. Department of Housing and Urban Development to originate FHA loans. Except in certain situations, it is also not possible to have two or more FHA loans at the same time. Second, the potential lender assesses the prospective home buyer for risk. The analysis of one's debt-to-income ratio enables the buyer to know what type of home can be afforded based on monthly income and expenses and is one risk metric considered by the lender. Other factors, e.g. payment history on other debts, are considered and used to make decisions regarding eligibility and terms for a loan. FHA loans require a minimum FICO score of 580 to qualify for 3.5% down or 500 for 10% down. Additionally, the lender checks the financial history of the person getting the loan to see whether they have been delinquent on loans owed to the U.S. government; if they are, they do not qualify for a FHA loan. Mortgage lenders can add their own rules, also known as overlays on top of these minimum standards. As each lender sets its own rates and terms, comparison shopping is important in this market. FHA approved lenders use a program called Desktop Underwriter also known as DU for mortgage approval. DU considers the potential borrower's debt ratio, reserves and credit score to make an automated credit decision. The FHA makes provisions for home buyers who have recovered from "economic events". Via the Back To Work - Extenuating Circumstances program, the FHA reduces its standard, mandatory three-year application waiting period for buyers with a history of foreclosure, short sale or deed-in-lieu; and two-year application waiting period after a Chapter 7 or Chapter 13 bankruptcy. For buyers who can show that the economic event was preceded by at least a 20% household income reduction which lasted for six