This is HUGE NEWS!
The FHA has announced it is waiving its 3-year foreclosure/short sale waiting period! There are requirements, it is the government, but this is a GAME CHANGER!
If you experienced a foreclosure, short sale, bankruptcy, etc you now only have to wait 1 YEAR before you can apply for an FHA mortgage - not 3 YEARS.
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Effective for FHA Case Numbers assigned on, or after, August 15, 2013, borrowers with a recent history of bankruptcy, foreclosure, judgment, short sale, loan modification or deed-in-lieu can apply — and get FHA approved – for an FHA-insured mortgage. This is going to GREATLY INCREASE the number of home buyers in the market over the next 6-12 months!
Here is a link to the actual FHA Mortgagee Letter: FHA Back to Work – Extenuating Circumstances 13-26ml.
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Please CONTACT US if you have questions or have already met your 1 year waiting period. We will get you in touch with a local lender to determine your eligibility! See Q&A below...
If you have experienced any of the following financial difficulties, you may be program-eligible :
- Pre-foreclosure sales
- Short sales
- Deed-in-lieu
- Foreclosure
- Chapter 7 bankruptcy
- Chapter 13 bankruptcy
- Loan modification
- Forbearance agreements
The FHA realizes that, sometimes, credit events may be beyond your control, and that credit histories don’t always reflect a person’s true ability or willingness to pay on a mortgage.
The FHA Back To Work – Extenuating Circumstances Program : Q & A
What is the FHA Back To Work – Extenuating Circumstances program?The FHA Back To Work – Extenuating Circumstances program is the FHA’s “second chance” for mortgage applicants who have experienced financial hardship as a result of unemployment or severe reduction in income.
Yes, you can use the FHA Back To Work program as a first-time buyer and as a repeat buyer.
Does the FHA Back To Work program waive the traditional 3-year waiting period after a foreclosure, short sale, or deed-in-lieu?Yes, the FHA Back To Work program waives the agency’s three-year waiting period. You no longer need to wait three years to apply for an FHA loan after experiencing a foreclosure, short sale or deed-in-lieu.
Does the FHA Back To Work program waive the traditional 2-year waiting period after bankruptcy?Yes, the FHA Back To Work program waives the agency’s two-year waiting period. You no longer need to wait two years to apply for an FHA loan after experiencing a Chapter 7 or Chapter 13 bankruptcy.
Which types of “events” are covered by the FHA Back To Work – Extenuating Circumstances program?The FHA Back To Work – Extenuating Circumstances program can be used by anyone who’s experienced a pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification; or who has entered into a forbearance agreement.
How do I apply for the FHA Back to Work – Extenuating Circumstances program?You can apply for an FHA Back to Work – Extenuating Circumstances mortgage with any FHA-approved lender. The mortgage approval process is the same for any other FHA-insured mortgage.
Mortgage rates for the FHA Back To Work program are the same as mortgage rates for any other FHA loan.
My current lender says that it’s not participating in the program? What do I do?If your current lender is not participating in the FHA Back To Work program, you can find another lender. Please ask us for a great referral to an FHA-approved lender!
What are the minimum eligibility requirements of the FHA Back To Work program?In order to qualify for the FHA Back To Work program, you must meet several minimum eligibility standards. The first is that you must have experienced an “economic event” (e.g.; pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification, forbearance agreement). The second is that you must demonstrate a full recovery from the event. And, third, you must agree to complete housing counseling prior to closing. You must also show that your household income declined by 20% or more for a period of at least 6 months, which coincided with the above “economic event”.
With the FHA Back To Work Program, how soon until I can buy a home after foreclosure?With the FHA Back To Work program, you can buy a home 12 months after a foreclosure.
With the FHA Back To Work Program, how soon until I can buy a home after a short sale?With the FHA Back To Work program, you can buy a home 12 months after a short sale.
With the FHA Back To Work program, you can buy a home 12 months after a deed-in-lieu of foreclosure.
With the FHA Back To Work Program, how soon until I can buy a home after Chapter 7 bankruptcy?With the FHA Back To Work program, you can buy a home 12 months after filing for Chapter 13 bankruptcy.
With the FHA Back To Work Program, how soon until I can buy a home after Chapter 13 bankruptcy?With the FHA Back To Work program, you can buy a home 12 months after filing for Chapter 13 bankruptcy.
Is there a counseling requirement in order to use the FHA Back To Work program?Yes, in order to the use the FHA Back To Work program, you must agree to attend housing counseling. The housing counseling required by the FHA Back To Work program will address the cause of your economic event, and help you consider actions which may prevent a re-occurrence. The counseling required by the FHA is typically 1 hour long. It can be completed on-line, in person, or via the internet.
Rich Ayers is a licensed Real Estate Managing Broker in Illinois. Ayers Realty Group has EXPERIENCED Brokers who specialize in Residential and Investment real estate in Naperville, Oswego, Plainfield and the surrounding suburbs of Chicago. We also own and manage multiple investment properties and help real estate investors find, buy, fix, rent and sell their investments. We are experienced Short Sale experts and hold the CDPE (Certified Distressed Property Expert and SFR (Short Sale and Foreclosure Resource) Designations. Visit our website at www.AyersTeam.com or follow us on Facebook or connect on LinkedIN.
