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.
There is a company in Hartford, Ct called 1st Alliance Lending. They are offering the Back to Work Program. Has anyone had any experience with this program?
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