Back to Work Program Lenders Redefine Mortgage Guidelines

Home mortgage loans are less complex through the FHA’s new program

Families who have struggled with financial hardships now have a more efficient option that allows first-time homebuyers and repeat homeowners to quickly apply for second-chance home mortgage loans.

The “Back to Work” program helps families who have faced an economic event like foreclosure, short sale, deed-in-lieu, bankruptcy, loan modification or forbearance agreement. These families are now able to apply for a new mortgage only 12 months after losing a home. Previously, the waiting period after such events was oftentimes greater than three years.



For millions of families who are still battling with the U.S. housing crash of 2008, the program is nearly a miracle. If the down payment you are able to make is less than 20 percent, a Federal Housing Administration (FHA) loan is right for you. Through “Back to Work,” borrowers may put down only 3.5 percent with no premiums or fees at closing.

Prospective borrowers may be eligible to apply if they are working again, possess a steady income and can prove previous extenuating circumstances through proper documentation. Participating borrowers must be able to meet general guidelines that involves employment, income and credit.

Lenders ensure borrowers have re-established a steady financial life through credit history reports. To be eligible, borrowers must have a 12-month credit history that is clear of late housing, installment debt payments, delinquency and other derogatory credit issues. Prospective participants with credit scores below 500 are not accepted, but those with no credit history whatsoever remain eligible.

If a prospective homeowner has open collections or any judgment accounts, a “capacity analysis” will be completed to determine if the borrower will be able to afford repaying other creditors and a new mortgage simultaneously.

Although an economic event will stay on a borrower’s credit history report for up to seven years, it’s never too late to start recovering. In fact, the FHA requires that all “Back to Work” participants complete at least one hour of one-on-one housing counseling to ensure they have a better understanding of how to become and stay fully recovered.

Counselors teach borrowers how to create and assess a household budget. They also help borrowers avoid scams and become better prepared for future financial shocks. Oftentimes, borrowers just need a small push to regain financial confidence, avoid poor spending habits and a routine of paying bills on time.

To begin the path back to homeownership, interested borrowers may connect with any lender that offers the “Back to Work” program. Borrowers should find a lender that has experience dealing with many other cases of extenuating circumstances. The loan is offered through Sept. of 2016 and can be found in all 50 states. “Back to Work” program lenders will evaluate previous hardships and affordability to ensure the program is right for each family’s situation.

Who Are Looking For Back to Work Mortgage Lenders

Gain these traits to participate in the “Back to Work” home loan program

If you are hoping for a second chance in the housing market after an economic event like foreclosure, short sale or bankruptcy, it’s not too late to apply for a new loan that could change your financial life. The FHA’s Back to Work home loan allows borrowers to put only 3.5 percent down with no premiums or fees at closing. The program, which is designed for families who have previously had financial hardships, runs through September of 2016. If you’re looking to get back on your financial feet with a new mortgage, you must first prove you have what it takes. Here are exactly the types of borrowers that Back to Work mortgage lenders are looking for.

Borrowers who have taken housing counseling
The FHA requires that all “Back to Work” participants attend at least one hour of housing counseling with an agency approved by the U.S. Department of Housing and Urban Development. Housing counselors help in the creation and assessment of a household budget. This helps eliminate unnecessary spending, ensuring you will have plenty of financial support for your new mortgage. Counselors also teach how to avoid scams and how to become better prepared for future financial shocks.

Borrowers who have satisfactory credit
Having a good credit score shows that you are a responsible candidate who will repay a mortgage back on time — a “good risk.” Since lenders have to trust that you will maintain a steady job and continuously show financial stability through a nearly lifelong commitment, they want to see that you can prove your creditworthiness. To be eligible in the program, borrowers must have a 12-month credit history that is clear of late housing, installment debt payments, delinquency and any other derogatory credit issues. Borrowers with credit scores below 500 are not accepted, but borrowers with no credit score whatsoever remain eligible.

Borrowers who have the proper documents
Before visiting a lending agency that offers the program, take time to gather the necessary documents you will need to prove you have fully recovered from your previous economic event. Bring bank statements from the past two or three months, including all checking and savings accounts, as well as any 401k or stock accounts. If you receive any additional income, such as child support, Social Security, alimony or a pension award, bring paperwork that provides proof. Make clear copies of both your driver’s license and your social security card. Most “Back to Work” lenders will also want to see tax returns and at least 30 days worth of pay stubs. Anyone who is signing the loan, including all cosigners, must be able to provide proper paperwork to be eligible. Some agencies list on their websites which documents you will need to begin a new mortgage.

The Best Home Mortgage Loans by The FHA

New home-buyer loans could save millions of families if they qualify

Qualifying for a new mortgage after a financial crisis isn’t easy. Millions of families are still recovering from the housing crash of 2008. The Federal Housing Administration (FHA) recognized the problem last summer when it launched its “Back to Work” lending program, which offers today’s best home mortgage loans for recovering families.

The program is designed for families that have faced an economic event that caused a loss of employment or income of 20 percent or more for a period of at least six months. This includes foreclosure, short sale, deed-in-lieu, forbearance agreement, Chapter 7 bankruptcy, Chapter 13 bankruptcy and loan modification.

These new home-buyer loans offer a second chance at the American dream with a shortened waiting period. In fact, families can now apply for a new mortgage only 12 months after losing a home. Outside of the program, the waiting period after losing a home typically lasts several years.

Am I eligible to participate?
Eligible borrowers must first meet basic requirements by the FHA that include basic standards for employment, income and credit. Next, the main borrower and any co-signers must be able to prove they have faced an economic event. This can be shown through W-2 forms or almost any document that shows a loss of employment or income.

Most importantly, lenders look for prospective borrowers who have made a full recovery since the occurrence of the economic event. Borrowers must have credit scores higher than 500. Your 12-month credit history report should be clear of late housing, installment debt payments, delinquency and any other derogatory credit issues. Borrowers with no credit score whatsoever remain eligible.

If you have had trouble making on-time payments, try setting up automatic payments through your bank’s online system. It’s an easy and convenient way to ensure you will never miss deadlines. Lenders also like to see that prospective borrowers are far below their credit limits. Although it’s easier said than done, try paying down your debts as much as possible.

Last, but not least, the FHA requires all “Back to Work” participants to complete housing counseling. The session must last at least one hour with an agency approved by the U.S. Department of Housing and Urban Development. Counseling should also be completed at least 30 days, but no more than six months prior to submitting a loan application. If you are in this range of time, a list of approved agencies can be found at www.hud.gov.

Counselors help borrowers create and assess a household budget. This will ensure your family and lending agency that you know how to make smart spending decisions and will be able to make your mortgage payments in full every month. Interested borrowers should speak with a lender that offers “Back to Work,” which is offered in all 50 states through Sept. of 2016.

Relive Your Dream with the New Back to Work Lending Program

In the tough economic times of today, it is often very difficult for people to even meet the daily necessities of life. For many Americans, the housing market crash in 2008 came as a final blow, and many families lost their homes. Thousands are still struggling to cope with the aftermath and are struggling to get back on the journey to home ownership.

The New back to work lending program is a ray of hope for affected families to reenter the market through a new mortgage loan. Families affected by adverse economic events such as the pre-foreclosure sale of a house, a short sale, bankruptcy or forbearance agreements, can now get back to home ownership.

What is the back to work lending program?
Designed to give another fair chance at a successful mortgage to families affected by an economic downturn, this program was launched in August 2012. The Federal Housing Administration (FHA) insures mortgage loans in all 50 states, including the District of Columbia.

How does back to work lending help?
Since the program waives the 3-year waiting period, families can apply for a new mortgage after just one year of losing their home. Before applying, families have to undergo counseling for at least one hour by a housing counselor. Issues such as credit issues, home investment, reverse mortgages and foreclosure avoidance are discussed at length. This is a mandatory session and must be completed at least 30 days prior but no more than 6 months before they apply for the new loan.

Although, the mortgage rates are almost the same as FHA loans, by being a part of the new back to work lending program, borrowers may put down just 3.5% on a new mortgage. Also, they don’t have to bear a premium on their interest rate or additional fees at closing.

Eligibility conditions:

• Borrowers must work with a home mortgage lender who offers the back to work program.
• Borrowers must have been through an adverse economic event.
• Borrowers must be able to reflect their ability and disposition to make regular monthly payments.
• Borrowers must attend a counseling session on home ownership.
• In the last 12 months prior to applying for the new home mortgage loan, borrowers must reflect a fair credit history. There must not be any delinquency in the past one year of applying.

If home owners can prove their past economic hardships, their full recovery and complete the housing counseling, a back to work loan is just right to help them. Borrowers aspiring to own a home again must find a FHA-approved lender to get started. It will only be a matter of time before they move into their new home.

Back to Work Program Lenders Are Approving Loans Now

FHA’s home mortgage loans are ready to be approved through a method that’s easier than ever

The home mortgage process has never been more simple. With Back to Work home mortgage loans, families that have been battling extenuating circumstances may now apply for a new mortgage only 12 months after losing a home.

The housing market crash of 2008 put millions of Americans across the country under the weather. Five years later in August of 2013, the FHA gave these families a second chance.

Mortgagee Letter 2013-26 states, “The FHA is continuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.”

If you have faced foreclosure, short sale, deed-in-lieu, Chapter 7 bankruptcy, Chapter 13 bankruptcy, forbearance agreement or loan modification, the time to apply is now. The program runs through Sept. of 2016.

The letter states, “As a result of the recent recession, many borrowers who experienced unemployment or other severe reductions in income were unable to make their monthly mortgage payments, and ultimately lost their homes.”

Back to Work program lenders are accepting individuals who can prove a loss of employment or income of 20 percent or more for a period of at least six months. If you can provide a W-2 form, a pay stub, an unemployment income receipt or another form of unemployment verification, you may be eligible.

Although you might still be recovering from an economic event, the FHA also requires borrowers to prove satisfactory credit. Borrowers with credit scores below 500 are not accepted into the program, but borrowers with no credit score remain eligible.

A satisfactory credit score proves to lenders that you will be able to repay a mortgage in a timely fashion. If the borrower can show a 12-month credit history that is clear of late housing, installment debt payments, delinquency and other derogatory credit issues, he or she should remain eligible.

Another way the FHA is giving lending agencies peace of mind is through housing counseling. “Back to Work” borrowers are required to participate in at least one hour of one-on-one housing counseling, which is now easier than ever. Families can find participating agencies online at www.hud.gov, and counseling may be completed online, by phone or in person. The agency must be approved by the U.S. Department of Housing and Urban Development.

Counselors ensure that families won’t make the same financial mistakes twice. They teach how to create and assess a household budget, how to avoid scams and how to better prepare for future financial shocks.

The letter states, “Housing counseling is an important resource for both first-time home buyers and repeat home owners.”

If you have faced an economic event, talk to a lending agency that offers the “Back to Work” home loan. These agencies will listen to your situation and keep your best interest throughout the duration of your next mortgage.