Have you recently experienced a financial hardship hindering you from a mortgage to purchase a new home? FHA has recently released their new Back to Work-Extenuating Circumstances Program for borrowers who have suffered an economic downfall that may have lead to foreclosure, short sale, or bankruptcies. In the past, homeowners would have to wait 3 years before being approved, but now with this new program there is light at the end of the tunnel for those borrowers in need.
An “Economic Event” is defined as a loss of income or employment (or both) beyond a borrower’s control, causing at least a 20% reduction in household income for at least 6 months. FHA recognizes that even the best borrowers could get put into this situation, and has taken action to allow them to purchase again quicker than in the past after financial difficulties. Under the new Back to Work program, eligible borrows may qualify for a new mortgage only 1 year after the “Economic Event.”
Of course there are guidelines to qualify, and in order to do so, these terms must be met by a borrower:
- Documented proof of the loss of employment and/or decrease of household income.
- Restablished satisfactory credit over a 12 month period, no late payments or derogatory marks.
- Provide letter of completion from an approved FHA housing counseling program-for this you must wait 30 days after completion of counseling, but nor more than 6 months to apply for a mortgage).
- Meet all current FHA underwriting guidelines.
So if you are one of the many across the nation who have had to face economic difficulties, don’t despair. Home ownership can once again be within reach sooner than you thought! Contact our local lender partner today with any questions you may have: DGBuyandRefi.com