This ARTICLE On FHA Back To Work Mortgage In California Was PUBLISHED On April 10th, 2015
FHA Back to Work Extenuating Circumstances due to an Economic Event is a special program developed by HUD.
- HUD, the parent of FHA, shortened the waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale to one year
- The back to work program reduced the standard two-year waiting period after bankruptcy, and the standard three-year waiting period after foreclosure, deed in lieu of foreclosure, and short sale
- The FHA Back to Work Mortgage program has been launched on August 15, 2013
- Unfortunately, there are strict guidelines with the FHA Back to Work Extenuating Circumstances due to an Economic Event mortgage loan program
In this article, we will discuss and cover the FHA Back To Work Mortgage In California.
Extenuating Circumstances With The FHA Back To Work Mortgage In California
The term, Extenuating Circumstances, is very specific with the FHA Back to Work Mortgage.
- Extenuating Circumstances with the FHA Back to Work Mortgage only applies to Extenuating Circumstances due to lack of work due
- Needs to be an involuntary termination and/or due to a reduction of household income for at least 20% or more for a period of at least six months
- Due to the extenuating circumstances due to the economic event, the borrower was forced to fall behind on his or her credit obligations and due to this shortfall of income
This was the cause of the bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale.
Credit Profile Of FHA Back To Work Mortgage Borrower
FHA Back to Work Mortgage underwriters will carefully review the credit profile of the Back to Work mortgage loan applicant.
- The mortgage applicant’s prior credit history prior to the economic event will be reviewed
- The borrower will need to have been timely with all of his or her monthly payments prior to the economic event
- The credit could have suffered during the time of the economic event
- But the credit has to have been perfect after the borrower has obtained new employment or after the bankruptcy and/or foreclosure
- Underwriters will want to see no late payments after the bankruptcy and/or foreclosure and re-established credit
- Late payments and derogatory credit after the economic event will be a disqualifier
Verification of Rent will be required for all FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan applicants.
A one-hour housing counseling course, whether online or in person, will be mandatory for all FHA Back to Work Extenuating Circumstances due to an Economic Event mortgage loan applicants. FHA Back to Work Extenuating Circumstances mortgage loan applicants needs to wait 30 days from the completion date of the HUD-approved housing counseling course in order to apply for an FHA Back to Work Mortgage.
All FHA Back to Work mortgage underwriting is done via Manual Underwriting since the automated underwriting system will not render an approve/eligible. All manual underwrites require verification of rent. Verification of rent can only be valid if the renter can provide proof of 12 months canceled checks or proof of bank statements for the past 12 months that show the rental payments being wired out to the landlord’s bank account. Rental cash receipts from the landlord cannot be used to confirm the verification of rent.
All manual underwrites have a maximum of 43% debt to income ratio caps. The minimum credit scores required are 580 FICO for a 3.5% down payment FHA Back to Work Mortgage home purchase loan.
FHA Back To Work Mortgage In California
California has probably the highest home values. Real estate values really appreciated during the housing boom. When the 2008 Real Estate and Credit collapse hit the state of California, California homeowners were one of the hardest hit. Millions of California homeowners could no longer afford their California homes due to the Great Recession of 2008. California, still with one of the highest home values in the country, has now seen the real estate market stabilize. California home buyers can now have a second chance to be homeowners again after bankruptcy and/or foreclosure. California home buyers who had an economic event due to an involuntary loss of a job or a 20% reduction of income for at least six or more months may qualify for the FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan program. If you are a California home buyer, or home buyer in other states and would like to know whether or not you qualify for the FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan program, contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at GCA Mortgage Group at firstname.lastname@example.org. Our team of licensed mortgage loan originators is FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan specialist.