FHA Back To Work Mortgage In California

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What Is The FHA Back To Work Mortgage?

FHA Back To Work
Gustan Cho Associates

FHA Back to Work Extenuating Circumstances due to an Economic Event is a special program developed by HUD , the parent of FHA where it shortens the waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale to one year than 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.

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 with Extenuating Circumstances due to lack of work due to 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 mortgage loan borrower was forced to fall behind on his or her credit obligations and due to this short fall 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 mortgage loan 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.

Housing Counseling

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 need to wait 30 days from the completion date of the HUD approved housing counseling course in order to apply for a FHA Back to Work Mortgage.

Manual Underwriting

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 verification of rent.

All manual underwrites have maximum 43% debt to income ratio caps.  Minimum credit scores required is 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 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 me at 262-716-8151 or email me at gcho@gustancho.com.  Our team of licensed mortgage loan originators are FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan specialists.

Related> FHA Back to Work Extenuating Circumstances due to an Economic Event

Related> FHA Back to Work Mortgage in California

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