FHA’s New Program Back to Work-Extenuating Circumstances
A few months ago the Federal Housing Administration made a huge mortgage rule change intended to help those Americans who were affected by the troublesome economic woes the last few years. The program is called “ Back to Work-Extenuating Circumstances Program”. It is intended to help hopeful home buyers return to becoming home owners once again. The new changes will make it possible for perspective home owners to apply for a new FHA home loan just one year after suffering their foreclosure/other financial tragedy.
This is possible for buyers when there is extenuating circumstances at blame for the foreclosure or financial hardship that led to them not being able to make their mortgage payments( hence the name of the program, “Back to Work-Extenuating Circumstances Program”). The homeowner must prove that were unable to meet the financial obligations due to either a major income hardship or employment hardship.
If you have or had a FHA Case assigned on or after August 15th 2013 this program will affect you and hopefully benefit you as well.
This is great news for Arkansas home buyers because if you’ll remember, the former mortgage lending rules said that any borrower who had a foreclosure, short sale, or similar default had to typically wait anywhere from 2-7 years before they could even consider getting another home loan. Now with this program as long as you qualify and submit the requirements, you can be back on your way to owning a home in 1 year!
FHA: Back to Work – Extenuating Circumstances Program.
Who is it for?
This program is for Borrowers who have had a recent history of any of the following circumstances: Bankruptcy, Foreclosure, Judgment, Short sale, Loan Modification, or Deed-in-Lieu of Foreclosure.
Who is Eligible?
The new program has some eligibility requirements like all other home loan programs. To be eligble the home owner must show the following:
- Documentation of facts must be provided. Proof that a major economic occurrence was the big contributing factor for the loss of their home. A major reduction in income, at least 20% over a 6 month time period, caused the inability to pay loan payments.
- Home loan borrowers will need to be able to prove that their income has fully recovered.
- Home loan borrowers need to show that their credit scores are in the satisfactory range for the program. This means that they show the following:
- Show a delinquency free rental payment history
- No more than ONE 30-day late payment due to any other creditor
- No collection accounts or court records reported on their current credit report (medical and identity theft don’t apply)
- Home loan borrowers must complete a home buyer counseling session with an approved HUD counseling agency at least 30 days before applying for the new mortgage application. Find a HUD Counseling Agency in Northwest Arkansas
- Potential borrowers must meet all other FHA eligibility requirements. What are the FHA eligibility requirements for Northwest Arkansas?
More Good News?
- No premium Interest Rate charged for this new FHA program.
- Additional costs/fees are not charged for the use of this program at Closing.
- This program follows standard FHA Mortgage guidelines.
- First-Time Home Buyers may use this program also
This pretty much sums up the who, what and where of the new FHA program. If you are interested in learning more or if you have any questions that I can clarify for you, please don’t hesitate to Contact Me
Have a Great Weekend Arkansas!
Steve Atwell, Buyer’s Agent for Northwest Arkansas
Email: Steve Atwell
Phone: 1-866-809-7059 | Cell: 479-685-3363 | Fax: 1-800-479-1503