Question

The client earns $3,000 in wages per month and will receive $700 per month in child support, once an agreement is finalized, has $2,000 in savings. She wants to by within 6 months, and plans to obtain FHA financing, which requires a 3.5% down payment, the average price of homes in the area is $100,000. She qualifies for a local down payment assistance program which pays for closing costs and prepaid expenses up to $4,000. She had a Chapter 7 bankruptcy discharged successfully 18 months ago, and she recently paid off an auto loan and student loans, her credit score is 620, her lease expires in two months, but

the property manager will allow for a six-month lease extension.
The client applied for a new rental unit with a lower rent in a different complex, but was rejected. She has always paid her rent on time. Which is the most likely reason for rejection?

A- Bankruptcy
B- Past rental history
C- Familial status
D- Insufficient savings

Answer 1

The most likely reason for the rental unit application rejection is the client's recent Chapter 7 bankruptcy, which can significantly impact creditworthiness.Option A is the correc answer.

Step-by-step explanation:

The most likely reason for rejection of the client's application for a new rental unit could be A- Bankruptcy. Given that the client had a Chapter 7 bankruptcy discharged 18 months ago, it is a recent and significant event that would negatively affect their creditworthiness in the eyes of many landlords, despite a credit score of 620. Additionally, the client successfully paid off an auto loan and student loans, which suggests that the rejection is not due to past rental history, familial status, or insufficient savings.

The probable basis for the rejection of the client's rental unit application is a recent Chapter 7 bankruptcy, even though it was discharged 18 months ago. This financial event is a notable factor impacting creditworthiness, likely making landlords cautious despite the client's credit score of 620. While the client's successful repayment of an auto loan and student loans showcases financial responsibility, recent bankruptcy remains a red flag for many property owners. The rejection is not attributed to past rental history, familial status, or insufficient savings, emphasizing the significant impact of recent financial events like bankruptcy on rental application outcomes.