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 firstname.lastname@example.org. Rob has been assisting Californians obtain mortgages and refinance for over 10 years. His specialty is VA loans and FHA loans.
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