Loans Now Available To Previously Troubled Borrowers

FHA recently announced a new mortgage rule that will benefit borrowers that have experienced foreclosure, short sale, deed in lieu or bankruptcy.  In the new Back to Work - Extenuating Circumstance program, borrowers with a record of foreclosure, short sale, deed in lieu or bankruptcy will still be able to get a new FHA loan in 12 months instead of the standard three year waiting period.

For a borrower to qualify, they must prove that major economic event like job loss or at least 20% income reduction (for at least 6 months) was the main reason in losing their home.  Furthermore, borrowers will also need to prove that they have recovered from their situation and they must have a satisfactory credit score.  And lastly, potential borrowers will need to complete a one hour one-on-one housing counseling session.  BUT, borrower's MUST have a satisfactory credit score and in good standing prior to the said major economic event. 

Borrowers "MUST" satisfy the following criteria in a minimum of 12 months to be considered borrower with "SATISFACTORY CREDIT":

- No delinquency payments on rentals.
- No more than one 30-day late payment due to other creditors.
- No collection accounts/court records reporting (other than medical and/or identity theft)

Back-to-Work program is now available until September 30, 2016. Once the borrower qualifies the program, the same 3.5% minimum FHA required down payment will apply. Mortgage insurance and closing costs will also apply.

Reverse mortgages are ineligible for Back to Work program.  In reverse mortgage, the home owners can borrow money against the value of his or her home.  No repayment will be applied until the borrower dies or the home is sold.

However, even with the new Back to Work program, the final decision to lend the borrower is still up to the lender.  So, it is VERY important for the borrowers to prove that they can satisfy all requirements for them to be able to obtain a loan. 

If you want to fast-track your home ownership but has trouble in obtaining a loan because of your previous record, then I can help. Don't hesitate to call.