Effective August 15, 2013, the FHA has waived its 3-year waiting period for Washington State borrowers with a recent history of bankruptcy, short sale or foreclosure. This program is effective for all FHA case numbers pulled on or after August 15, 2013 expiring September 30, 2016.
For previous guidelines, preview an article I wrote last year on
“How to Purchase A Home with USDA, FHA, VA or conventional financing after a foreclosure, bankruptcy or short sale.”
What Is the FHA “Back to Work” Program?
The FHA Back to Work – Extenuating Circumstances Mortgage Program is designed for borrowers that faced an adverse financial event such as a foreclosure, short sale or bankruptcy in the past 3 years. More specifically, it is designed to assist potential home buyers that found themselves in a financial hardship due to reduced income or job loss.
If you’ve experienced any of the following financial hardships, you may be eligible:
– Ch 13 Bankruptcy
– Ch 7 Bankruptcy
– Short Sale
– Loan Modification
– Deed-In-Lieu of Foreclosure
How Do I Qualify For the FHA “Back To Work” Program?
All banks may differ, but our bank for example, requires a 620 credit score or higher to qualify for FHA financing. FHA realizes that often times, circumstances in life occur outside of your control, and that “credit scoring” and credit history may not always explain a person’s true ability to pay back a mortgage debt.
FHA does however require applicants to qualify under other general FHA guidelines (debt-to-income, current employment history, and county FHA loan limit guidelines).
Lastly, you must be able to prove “satisfactory” credit history since the adverse event. I help my clients put together documentation to show a good credit history prior to the 20% loss in income, that the derogitory credit history was a direct result of the adverse economic event, and that you’ve been able to re-establish your credit in the past 12-months leading up to your loan application for the FHA “Back to Work” Program.
Key Factors Explaining the FHA “Back to Work” Program
– must be 12 months post foreclosure, short sale or bankruptcy
– must show/prove a 20% loss of household income
– must show a 12-month history of good credit leading up to loan application
– must agree to attend a 1-hour FHA housing counseling program (via phone or internet)
– must have a min credit score of 620
If you have any questions, please feel free to contact me directly at (425) 350-7136 or email me at email@example.com. I love helping my readers, and with this program, preparing correctly is the most important thing you can focus on.
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