FHA Back to Work Versus Other Loan Programs

This BLOG On FHA Back to Work Versus Other Loan Programs Was Written By Gustan Cho NMLS 873293

With traditional loans such a government loans and Conventional Loans, there are mandatory waiting period after a Chapter 7 or Chapter 13 Bankruptcy discharged date to qualify for a mortgage loan. There are other loan programs available today such as NON-QM Loans where there are no waiting period after bankruptcy and/or foreclosure to qualify for a mortgage loan. Here are some points in qualifying for a mortgage loan after bankruptcy and foreclosure:

  • The current waiting period for a home buyer with a prior bankruptcy is two years from the discharge date of their Chapter 7 bankruptcy to qualify for a FHA Loan. 
  • The current waiting period for a home buyer to qualify for a FHA Loan who had a deed in lieu of foreclosure or a foreclosure is three years from the recorded date of the foreclosure or deed in lieu of foreclosure. 
  • FHA borrowers one year into a Chapter 13 Bankruptcy can qualify for a FHA Loan as long as they have made 12 months of timely payments to their creditors.
  • There is no waiting period to qualify for a FHA Loan after a Chapter 13 Bankruptcy discharged date.
  • All borrowers who had a Chapter 13 Bankruptcy discharge needs to be manually underwritten if their Chapter 13 Bankruptcy has not been seasoned for two years which requires rental verification.
  • There is a three year waiting period from the date of a short sale for a home buyer to qualify for a FHA mortgage loan.
  • HUD implemented the FHA Back To Work Extenuating Circumstances due to an economic event FHA Loan Program which shortens the waiting period to one year after a bankruptcy or foreclosure.
  • The FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan program turned out to be a major flop and a losing proposition which really stressed out many FHA Borrowers.
  • The FHA Back to Work was supposed to give home buyers who were forced into bankruptcy due to being out of work a chance to qualify for a FHA Loan one year after bankruptcy or foreclosure but most lenders found a way of not doing the loan than helping these borrowers get a loan approval.

There are differences between the FHA Back to Work Versus Other Loan Programs where FHA Back to Work Versus Other Loan Programs was supposed to offer a reduced waiting period after bankruptcy and foreclosure.  HUD has created the FHA Back to Work Extenuating Circumstances mortgage program back in August for those home buyers who fell victims to the real estate, financial, banking, and credit meltdown.  The FHA Back to Work Extenuating Circumstances mortgage loan program was supposed to shorten the waiting period for those who had a bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale to a one year waiting period.  However, it does come with rules and strict guidelines in order to qualify and this program turned out to be a major mess. Now there are better programs than the FHA Back to Work Versus Other Loan Programs. NON-QM Loans do not require any waiting period after bankruptcy or foreclosure and The Gustan Cho Team at CrossCountry Mortgage can close NON-QM Loans in 21 days or less.

Qualification And Guidelines Of FHA Back to Work Versus Other Loan Programs

All FHA Back to Work Versus Other Loan Programs are done via manual underwrites.  You need to be able to locate a mortgage lender that does manual underwrites and does welcome FHA Back to Work Extenuating Circumstances mortgage loans which now is very difficult to find because the FHA Back To Work Extenuating Circumstances turned out to be a total nightmare and nobody hardly does them anymore. I have started processing FHA Back to Work Extenuating Circumstances mortgage loans in full force and I am one of the lucky ones that got them done but it was like pulling teeth. If you want to know whether you qualify for the FHA Back to Work Versus Other Loan Programs,  I would love to be able to help you and can tell you whether you are eligible or not. However, I strongly recommend the NON-QM Loan program that The Gustan Cho Team at CrossCountry Mortgage offers than the FHA Back to Work Mortgage Program.

Here are the basic eligibility requirements for the FHA Back To Work Program:

  • Be able to document and prove that the cause of the bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale was the result of a job loss or loss of 20% of total household income for at least six months prior to the homeowner filing for bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale.
  • A detailed letter of explanation along with supporting documents is required.
  • Please email a detailed letter of explanation to gcho@gustancho.com.
  • You are welcomed to contact me at 262-716-8151 if you have any questions.
  • Apply online at www.gustancho.com by clicking the APPLY NOW icon on the top right of this website.
  • I will then review your mortgage application and run a credit check and review your mortgage application, letter of explanation,  and your credit report/scores with an underwriter.
  • If your mortgage file seems doable by the mortgage underwriter, we then proceed to the next level.
  • You need to complete a one hour HUD approved housing counseling.
  • Your mortgage application cannot be started until 30 days from the completion of your HUD approved housing counseling.
  • While we are waiting for the 30 days waiting period after completion of your HUD counseling, I will request mortgage documents that will be needed such as two years tax returns, 2 years W2s, 60 days bank statements, recent pay check stubs, and other required documents.
  • Once we have passed the 30 days waiting period, I will issue you a pre-approval so you can start shopping for your new home.
  • Once you get a home you like to purchase, sign the real estate purchase contract and submit it to me for processing and underwriting.
  • FHA Back to Work Extenuating Circumstances mortgage loan programs is expected to take between 30 days to 45 days to close upon the loan officer receiving the signed mortgage loan application as well as the required documents.
  • Please contact me if you are interested in the FHA Back to Work Extenuating Circumstances mortgage loan program.
  • Again, the FHA Back To Work Program is not a loan program that I would recommend and if you are a borrower who is adamant in trying to go for it, I would suggest a TBD Underwrite.
Gustan Cho NMLS ID # 873293

Related> 2015 FHA Back To Work Mortgage Guidelines

Related> FHA Back To Work Mortgage California

Related> FHA Back To Work Extenuating Circumstances Mortgage Program

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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