Back To Work Extenuating Circumstances Versus NON-QM Loans

FHA Back To Work Extenuating Circumstances Mortgage Loan Program: DISCONTINUED

HUD just launched the Back to Work Extenuating Circumstances due to economic event mortgage loan program which shortens the waiting period for those who have had filed bankruptcy, had a foreclosure, a deed in lieu of foreclosure, or short sale to one year.

• There are strict rules and regulations and not everyone can qualify
• The Back to Work Extenuating Circumstances due to economic event mortgage loans are all manually underwritten
• So not every lender will be able to process and underwrite these mortgage loans

Banks will not be able to do them and only a few select mortgage bankers are participating in this program.

Back To Work Extenuating  Circumstances Qualifications

Back to Work Extenuating Circumstances due to an “Economic Event”

An “Economic Event” is when a borrower has experienced an occurrence beyond their control, which resulted in a loss of income, loss of employment, or a combination of both.  The manual downgrade of an “Accept/Approve” recommendation, may be eligible for FHA purchase transaction financing provided all the following requirements are met:

• The “Economic Event” lasted at least 6 months; and
•  The “Economic Event” resulted in a 20% or more reduction in the borrower’s household income;
• Documented evidence that the delinquencies were due to the “Economic Event” must be provided;
• The borrower must have re-established a “Satisfactory Credit” history for at least 12 months without any late payments in the past 12 months;

The borrower must have fully recovered from the “Economic Event”.

Other Requirements For FHA Back to Work Mortgage Loan Program

Borrowers who are a qualified candidate for the new FHA Back to Work Extenuating Circumstances mortgage loan program need to make sure that you get your signed housing counseling certificate as soon as possible.  The mortgage application cannot be started until 30 days after you receive your HUD-approved housing counseling certificate.

UPDATE On Back To Work Versus NON-QM Loans

As mentioned earlier, the Back To Work Extenuating Circumstances due to an economic event mortgage loan program no longer exists.

• NON-QM Loans offered by Gustan Cho Associates has no waiting period after a housing event and a one year waiting period after bankruptcy
• It does require 20% down payment
• Bank Statement Loans for self-employment borrowers do not require income tax returns
• We go by deposits of either personal or business bank statements
• 24 months of bank statement deposits are averaged to get a monthly income
• Borrowers need to be self-employed for 2 years and cannot have any bank overdrafts in the past 24 months to qualify

For more information on our NON-QM Loans and Bank Statement Mortgage Loan Program for self-employed borrowers, please contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com.