Published October 16, 2026 · Grants & Co Consultants
FHA and conventional loans follow different program rules. Within conventional lending, the underwriting method can also change the treatment of collection accounts. Start with the program your lender is considering, then review each account.
Bring these questions to your lender
- Will this file use automated or manual underwriting?
- Which collections must be paid, documented, or included in debt calculations?
- Are medical collections treated differently?
- Does your company have additional requirements beyond the program guide?
HUD publishes FHA policy in Handbook 4000.1. Fannie Mae separately publishes its conventional underwriting requirements. A rule copied from one program should not be treated as permission under the other.
Compare the whole loan
Collection treatment is only one part of a useful comparison. Ask about down payment, mortgage insurance, interest rate, closing costs, and total monthly payment. A program that handles one account differently may have other costs or conditions.
Write the lender’s answer next to each account, including the document needed and when it is due. That worksheet helps keep credit preparation aligned with the proposed mortgage. It does not replace underwriting or guarantee approval.
Sources and next steps
- hud.gov — FHA Handbook 4000.1
- selling-guide.fanniemae.com — consumer and lending guidance
- singlefamily.fanniemae.com — consumer and lending guidance
General education. Requirements and availability can change. Your lender determines eligibility and approval.
