I have four questions for the board: I have an old (defaulted 6 years ago) SL through NYSHESC for $3000. I am going to try to get an FHA mortgage in November. Am I better off paying it all off in one shot around August, or should I start the rehab program right now & only make the minimums through November? Will a lump-sum payment keep the loan in default status forever on my CR's, or will they show Paid in Full? Which solution bodes better for my FICO? Does it matter to FHA whether it is in rehab status, or Paid in Full?

Thanks for your help!

In order to qualify for a FHA mortgage, the default must be resolved, either by paying it off in full or rehabbing it. There is not enough time for you to complete the rehab by November so paying it off in full is your only option. Scorewise, you would have been better off with rehab.

There is no such thing as rehab status in credit reporting. You are either in default or out of default...there is no middle ground.

just finished trying to get a fha loan. Many loan officers told me that fha has a new program that really only looks at your payment history for the last 12 months. They also said the chargeoffs from before did not count against me now.