FHA Back to Work Program

Wednesday, August 21, 2013
The FHA Back to Work Program was announced on August 15th in an effort to loosen restrictions on those whose credit was negatively affected as a result of the recent recession.
The Back to Work program shortened the waiting period for borrowers who had a Foreclosure, Deed-In-Lieu of Foreclosure, Short Sale or Chapter 7 bankruptcy from the prior 3 year waiting period to a new 1 year waiting period.

There are three main steps to determine if you qualify:

1) Did you have a 20% or more reduction in income for at least 6 months?

      a. Loss of income can be a result of pay cut.

      b. Income reduction can be a result of a loss of employment. 

2) Was the derogatory event a result of the reduction in your income?

      a. Must have exhibited satisfactory credit prior to the event.
      b. Derogatory event occurred after the loss of income.
3) Have you recovered from the derogatory event?
      a. Credit history is clear of late housing payments.
      b. Any open mortgage is current and shows 12 months of satisfactory payment history.
      c. No more than one 30 day delinquency on payments due to creditors in last 12 months.
After it’s determined that you qualify for the FHA Back to Work Program you must complete Housing Counseling with a HUD-Approved counseling agency.
This new program may open the door for thousands of buyers who have been sitting on the sideline due to the long waiting periods. If you’re interested in finding out if you qualify, give us a call and we’ll take a look at your situation.
Disclosure: This is a brief overview of the FHA Back to Work Program for informational purposes. Guidelines for the are subject to change; contact us for accurate up-to-date requirements and guidelines.
Dustin Bowersett 8/21/2013

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