Non-QM Loans Versus FHA Back To Work Mortgage

This BLOG On Non-QM Loans Versus FHA Back To Work Mortgage Was UPDATED On October 26th, 2017

This blog on Non-QM Loans Versus FHA Back To Work Mortgage is an update of an older blog post that I published on FHA Back To Work Mortgage Program which no longer exists.

  • However, we will leave the content on FHA Back To Work Extenuating Circumstance Due To An Economic Event for archival purposes.
  • The Gustan Cho Team at USA Mortgage has an alternative financing program called NON-QM Loans where it is equivalent to the FHA Back To Work Mortgage Program.
  • We will discuss NON-QM Loans Versus FHA Back To Work Mortgage on this article.

The Old FHA Back To Work Mortgage: No Longer In Existence

HUD recently approved a one year waiting period after a bankruptcy or foreclosure to qualify for a FHA insured mortgage loan via the FHA Back to Work Extenuating Circumstances due to economic event.

  • The FHA Back to Work Extenuating Circumstances due to economic event mortgage program drastically reduces the waiting period for those with a prior bankruptcy and/or foreclosure to a one year mandatory waiting period
  • The traditional waiting period after Chapter 7 Bankruptcy discharged date is a two year waiting period after the discharge date to qualify for FHA Loans
  • The traditional two year waiting period after a foreclosure and the traditional 3 year waiting period after a foreclosure, deed in lieu of foreclosure,  and short sale. 
  • However, there are conditions that mortgage loan borrowers need to follow and abide by.

As mentioned earlier, the FHA Back To Work Mortgage Program is no longer in existence and is replaced by NON-QM Loans at The Gustan Cho Team at USA Mortgage.

Basic Guidelines For FHA Back To Work Extenuating Circumstances Due To Economic Event Mortgage Program

To qualify for HUD’s new FHA Back to work extenuating circumstances due to economic event mortgage programs, the mortgage loan borrower needs to have been unemployed, underemployed, and/or have had a significant economic event six months prior to filing bankruptcy and/or foreclosure proceedings.

  • The mortgage loan borrower needs to have proof that he or she has re-established his or her credit since the economic event that led to the foreclosure and/or bankruptcy and show that is now stable with a full time job and not have had any late payments in the past 12 months. 
  • Verification of rent is a must but not a requirement. 
  • Rental verification adds a lot of weight in any mortgage application. 
  • If you are a renter, you need to pay your monthly rents by check. 
  • The mortgage application cannot be started until 30 days after the mortgage loan borrower completes a one hour HUD approved housing counseling class.  
  • A signed HUD housing course certificate signed by the housing counselor needs to be submitted with the mortgage loan application.

Again, the FHA Back To Work Mortgage is no longer in existence. NON-QM Loans offered by The Gustan Cho Team at USA Mortgage is an alternative form of mortgage loan for borrowers with no waiting period after foreclosure and short sale.

Debt To Income Ratios For FHA Back to Work Extenuating Circumstances Due To Economic Event Mortgage Program

All FHA Back to work extenuating circumstances due to economic event mortgage programs in the United States are manually underwritten.

  • The maximum front end ratios are capped at 31% and the back end debt to income ratios are capped at 43%. 
  • Currently, regular FHA mortgage loans via DU AUS have front end ratios at 46.9% and back end ratios at 56.9%.

NON-QM Loans An Alternative Form Of Home Loan With No Waiting Period Requirements

NON-QM Loans is a specialty home loan program where there is no waiting period after a housing event:

  • No Waiting Period After Foreclosure
  • No Waiting Period After Deed In Lieu Of Foreclosure
  • No Waiting Period After Short Sale
  • One Year Waiting Period After Chapter 7 Bankruptcy discharged date
  • 10% to 20% down payment on NON-QM Loans

NON-QM Loans is a form of bridge financing where there is no waiting period after a housing event and one year waiting period after a Chapter 7 Bankruptcy discharged date. The Gustan Cho Team at USA Mortgage is a full service five star direct lender with no lender overlays on government and conventional loans. Home Buyers who need to get qualified for NON-QM Loans or government and/or conventional loans with no lender overlays, please contact us at 1-800-900-8569 or text us at 1-262-716-8151 for faster response. We are available 7 days a week, evenings,weekends, and holidays by phone or email us at gcho@usa-mortgage.com.

Gustan Cho NMLS ID # 873293

Related> Update On FHA Back To Work 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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