FHA Back To Work Mortgage Loan Program: Qualify After One Year After Bankruptcy And Foreclosure

FHA Back To Work Home Loans

Back To Work Mortgage Loan Program

Christmas came early this year for home buyers who have had previous bankruptcy, foreclosure, short sale, and deed in lieu of foreclosure.  Millions of Americans have lost their jobs and homes due to the Great Recession of 2008 and were forced into bankruptcy and many lost their homes through foreclosure.  The entire mortgage industry underwent through a major overhaul and many mortgage loan products like no doc loans, stated income loans, and teaser rate loans completely evaporated from the industry.  Thousands of sub prime mortgage lenders literally closed their homes and millions of loan originators were forced out of business due to strict new licensing guidelines as well as the loss of sub prime business.  Those mortgage loan orginators who were weather the storm had to adapt to a complete new system and learn the new mortgage guidelines and get new licensing done such as taking national and state examinations and go through criminal and financial background checks.

Current Waiting Period After Bankruptcy And Foreclosure To Qualify For Home Loan

The current waiting period for home buyers who had a prior bankruptcy is 2 years from the discharge date.  The current waiting period requirements for home buyers who had a prior foreclosure, short sale, or deed in foreclosure is three years from the date the foreclosure or deed in lieu was recorded on the county records.  Three years is a long time.  FHA recently announced the Back to Work mortgage loan program where the waiting period get shorten to one year from the bankruptcy discharge date and one year from the recorded date after a foreclosure or deed in lieu of foreclosure.  This will open up doors to many home buyers who have recovered from a bankruptcy and/or foreclosure and enable them to purchase a home if and only if they have re-established their credit.  Not everyone will qualify.  There are certain requirements that apply for the Back to Work Mortgage Loan Program.

Minimum qualifications for the FHA Back to Work Mortgage Loan Progam

Not everyone will qualify for the new FHA Back to Work Mortgage Loan Program.  The first and foremost important criteria is that FHA requires a good explanation on the extenuating circumstances on the reason the borrower had to file bankruptcy and/or have a foreclosure, deed in lieu, or short sale.   The reason they are looking for is that the borrower was not employed or had income reduction of at least 20% and that was the cause of filing bankruptcy or having a foreclosure.   After filing bankruptcy and/or having a foreclosure, FHA wants to see that the mortgage loan borrower has re-established their credit and have not had a late payment in the prior 12 months.  The mortgage loan borrower needs rental verification and the only way rental verification can be proven is by providing cancelled checks which is payable to the landlord for the previous 12 months.  If the mortgage loan borrower is renting their unit from a property management company, a letter from the property management company will be sufficient.

Back to Work Mortgage Loan Program Underwriting Requirement

All of Back to Work Mortgage Loan Program loans are manually underwritten.  Only mortgage lenders that do manual underwrites will be able to do Back to Work Mortgage Loan Program loans.  Your best bet is to contact a mortgage broker who has access to wholesale mortgage lenders who do manual underwrites.

If you are interested in FHA Back to Work Mortgage Loan Program, contact Gustan Cho Associates at 262-716-8151 or email us at gcho@gustancho.com.  You can also subscribe to our daily mortgage and real estate newsletter at www.gustancho.com .

Related> 2015 FHA Back To Work Mortgage Guidelines

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

Related> FHA Back To Work 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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