Back To Work Extenuating Circumstances Versus NON-QM Loans

This BLOG On Back To Work Extenuating Circumstances Versus NON-QM Loans Was UPDATED On October 9th, 2017

This BLOG On Back To Work Extenuating Circumstances Versus NON-QM Loans is a rewrite from an older blog that was published about FHA Back To Work Extenuating Circumstances due to an economic event.

  • The blog on Back To Work Extenuating Circumstances will remain for archival purposes.
  • The FHA Back to Work Extenuating Circumstances loan program has been discontinued and no longer exist.
  • However, since the publication of this original blog, The Gustan Cho Team at USA Mortgage launched NON-QM Loans and Bank Statement Mortgage Loans for Self Employed Borrowers.

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 mortgage 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 borrowers has experienced an occurrence beyond their control, that 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;
  • Borrower must have reestablished a “Satisfactory Credit” history for at least 12 months without any late payments in the past 12 months;
  • Borrower must have fully recovered from the “Economic Event”

Housing Counseling Required

  • The borrower must attended an approved housing counseling program at least 30 days, but no more than 180 days prior to initial application.
  • Counseling must be performed by a HUD approved housing counseling agency, state housing finance agency, approved intermediaries or their sub-grantees.
  • Counseling may be conducted in person, via telephone, via internet , or other methods approved by HUD.
  • Upon completion of the required counseling, the borrower will be given a Counseling Certificate of Completion.
  • The certificate must include the counselor’s handwritten signature.
  • In instances that the counseling certificate is received electronically or via other means and does not include a counselors handwritten signature, the borrower must obtain the counselors signature.
  • This may be accomplished by faxing or emailing the certificate to the counselor to obtain their handwritten signature.

Other Requirements For FHA Back to Work Extenuating Circumstances 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.

2017 UPDATE On Back To Work Extenuating Circumstances 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 The Gustan Cho Team at USA Mortgage 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 is averaged to get a monthly income.
  • Borrowers need to be self employed for 2 years and cannot have any bank overdrafts in 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 The Gustan Cho Team at USA Mortgage at 1-800-900-8569 or text us at 262-716-8151 for faster response. Or email us at gcho@usa-mortgage.com.

Gustan Cho NMLS ID # 873293

Related> FHA Back To Work Mortgage

Related> Do You Qualify For FHA Back To Work Mortgage?

Related> FHA Back To Work Extenuating Circumstances Mortgage

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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