Countdown To Getting A FHA Loan After Foreclosure Just Got Shorter

HUD’s Back To Work Program has relaxed some requirements for those borrowers with a short sale, foreclosure, or bankruptcy on their record to get a FHA loan. Continue reading →

Oct 17, 2013 /prREACH/ -- The Federal Housing Administration recently announced that homebuyers can now get a FHA loan after 12 months from a short sale, bankruptcy, or foreclosure. Due to FHA’s Back to Work - Extenuating Circumstances Program, the FHA is relaxing some of the requirements in getting a FHA loan. The HUD Back to Work Program has requirements that borrowers must meet. There must be a decline in the borrowers’ household income of 20% or more lasting at least six months that contributed to the short sale, foreclosure, or bankruptcy of Chapter 7 or Chapter 13. The borrower must have had good credit both prior to the short sale, bankruptcy, or foreclosure, and then afterwards, re-establishing credit in the 12 months after the occurrence. If a short sale or foreclosure took place, it must have been on a primary residence. The Back to Work Program applies only to purchase transactions, not refinances. The advantage of an FHA loan is that it allows for a very low 3.5 % down payment. A greater advantage is that it also allows the applicant the ability to borrow more money from the bank via an FHA-back loan compared to a conventional loan. Many lenders require a 2 year waiting period after such a hit on their credit history. By contacting a loan officer familiar with FHA’s Back to Work Program, who also understands the differences in FHA loan limits in California’s various counties, a home buyer can get back into the housing market quicker than previously thought. To find out more information on getting a FHA loan after a short sale, bankruptcy, or foreclosure, contact Rob at 888-242-1724, or at [email protected]. Rob has been assisting Californians obtain mortgages and refinance for over 10 years. His specialty is VA loans and FHA loans.