FHA’s Back To Work Program – Own a home again with a shorter waiting period after an economic event!
How would you like to be eligible for an FHA loan and not wait 3 years after a foreclosure, pre-foreclosure or deed in lieu? I’m sure it wouldn’t take long for you to answer, YES! FHA has made this possible through Mortgage Letter 13-26 with their Back to Work Program!!
This program is designed for those who experienced a foreclosure, pre-foreclosure, deed in lieu, short sale and/or bankruptcy which resulted from an economic event such as loss of income or employment. We all know the economy is on the road to recovery but there have been some bumps along the way. The Back to Work Program allows someone who experienced one of these unfortunate events a chance to be a homeowner again in as little as 12 months from the occurrence.
Of course with all programs of this nature the guidelines are fairly strict. I’ll list some of them below but if this program is something you wish to pursue I would encourage you to call my office today!
- Economic event must have caused a reduction in household income of at least 20% for at least 6 months
- Loan is for the purchase of a primary residence only
- Buyer must attend a HUD approved housing counseling program at least 30 days but no more than 6 months prior to application
- Buyer must have re-established credit with no derogatory items for the 12 months prior to the application
So in the list above we mention the term “household income.” Let’s define this term…household income is the gross income of everyone who resided in the property as their primary residence AND were on the loan. This means that a borrower and co-borrower’s income would only fall into this category if they were both on the loan. Also if anyone was a non-occupant co-borrower they would not be included since the home in question was not their primary residence.
It’s also important to mention that not all of the household members need to be on the new loan application. This is nice in the event not all parties meet the guidelines. As long as one occupant meets the credit and income guidelines we can proceed.
Life and economic events happen and when they do it’s nice to know that there is an option to own a home again in less than 3 years. The FHA Back to Work Program is a great opportunity to re-establish your-self as a homeowner. My team and I would love to be the ones who get you back into a home so give us a call today.