The Federal Housing Administration (FHA) is offering a homeownership program that will put previously troubled borrowers on the fast track to owning a home, again. This new program, called “Back to Work-Extenuating Circumstance,” shortens the standard three-year waiting period to 12 months. As part of the FHA’s ongoing mission, the new program aims to make sure that qualified borrowers are not being unnecessarily shut out of the housing market.
This is good news for borrowers who lost their home because of specific financial hardships, but can now demonstrate that they have regained their financial footing.
Individuals that have been through any of the below financial hardships are eligible for the program:
• Chapter 7 or Chapter 13 bankruptcy
• Deed-in-lieu
• Forbearance
• Foreclosure
• Loan modification
• Loss of income, employment or both that totaled at least 20 percent of previous earnings for at least six months, including copies of applicable termination notices or changes in employment status.
• Pre-foreclosure sales
• Short sales
Borrowers must also meet other verifiable requirements to participate in the program. These include:
• Proof of borrower’s current income. This can be verified with W-2 forms or federal tax returns that show the desired mortgage would be affordable and sustainable.
• Credit history, both before and after the financial hardship event. This information must be free from late payments or other major credit issues, including rental / housing payments and accounts delinquent by 30 days or more.
• A credit score of at least 500.
• Housing counseling by a HUD-approved counselor at least 30 days but no more than six months before
submitting an FHA application.
For consumers meeting all of these criteria as well as other FHA mortgage guidelines, the “Back to Work program” is now available nationwide through FHA-approved lenders. Once participating lenders determine that mortgage applicants meet all eligibility and policy criteria, the same 3.5 percent minimum FHA down payment requirement will apply. Mortgage insurance and closing costs will also apply. The only FHA program that is ineligible for the “Back to Work program” are reverse mortgages.
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.