How Does FHA Back To Work Extenuating Circumstances Mortgage Work?

HUD has launched the FHA Back to Work Extenuating Circumstances Mortgage due to an economic event mortgage program last August 15, 2013 which waives the two year waiting period after a bankruptcy and the three year waiting period after a foreclosure, deed in lieu of foreclosure, and short sale.  If home buyers qualify for the FHA Back to Work Extenuating Circumstances Mortgage due to an economic event residential mortgage loan program, they can qualify for a FHA insured mortgage loan after one year from the bankruptcy discharge date, recorded date of their previous foreclosure and/or deed in lieu of foreclosure, or short sale date reflected on their HUD’s settlement statement.  Traditional waiting period after bankruptcy is 2 years waiting period after the discharge date of the bankruptcy and the waiting period after a foreclosure and/or deed of foreclosure is 3 years from the recorded date of the foreclosure and there is a 3 year waiting period after the HUD’s settlement date of a short sale.

Qualification Requirements For FHA Back To Work Extenuating Circumstance Mortgage Loans

To qualify for FHA Back to Work Extenuating Circumstances Mortgage due to an economic event mortgage loan program the mortgage loan borrower needs to have been unemployed and out of work and due to his or her unemployment, the result was a bankruptcy and/or foreclosure or short sale.  The FHA Back to Work mortgage applicant needs to have been out of work for a period of at least six months.  The FHA Back to Work mortgage applicant needs to have been terminated and/or laid off in order for him or her to qualify for the FHA Back to Work extenuating circumstances mortgage loan program.  If you voluntarily quit, you will not qualify for the FHA Back to Work mortgage loan program.

Credit History Analysis

The FHA Back to Work mortgage applicant needs to have had good credit prior to his or her unemployment.  Bad credit such as late payments, collections, charge offs, during the unemployment period is allowed and accepted.  After the FHA Back to Work mortgage applicant has secured new employment and has been financially stabilized, he or she needs to have re-established credit and no late payments whatsoever.  Reserves is a major plus and so is rental verification.  Rental verification is only proven if the FHA Back to Work mortgage applicant can provide 12 months of cancelled checks paid to their landlord.  These are called extenuating circumstances.

HUD Approved Housing Course Requirement

HUD also requires that all FHA Back to Work Extenuating Circumstances due to an economic event mortgage applicants to take a HUD approved housing counseling course and obtain a certificate of completition signed by the housing counselor and dated.  The mortgage applicant cannot apply for a formal Back to Work Extenuating Circumstances due to an economic event mortgage application until after 30 days of the housing certificate date.

Gustan Cho

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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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