FHA offers Back to Work Loans for Mortgage Seekers

Anyone who has been through a financial crisis can understand how difficult the situation can get. After a period of financial hardship, it can be very challenging to start anew. For millions who lost their homes to a short sale, bankruptcy or similar hardships, seeking a new home loan meant that they had to wait for up to 3 years before they could apply for one. FHA launched the Back to Work lending program on August 15, 2013, with a view to help families still going through an unfortunate economic event. With this lending program, borrowers could apply for a home loan again just after a year of an economic event.

The Federal Housing Administration(FHA) defines an economic event as “any occurrence beyond the borrower’s control that results in loss of employment, loss of income or a combination of both, which causes a reduction in the borrower’s household income of 20 percent or more for a period of at least six months.” The household income includes the overall income of a household, not just one member.

Economic hardships such as a prior short sale, deed-in-lieu, forbearance agreement and loan modification are often beyond a borrower’s control. If a family can provide documented proof of an economic event and also prove that their credit score has been showing an upward trend for at least one year, Back to Work mortgage lenders can consider the family for this lending program.

Reentering the market is an important decision for families after they have been through financial hardship. However, before they apply for a second chance at home ownership, the FHA requires that the borrowers must undergo a 1-hour housing counseling session with an agency approved by them. This session could be completed in person, over the phone or online. The session takes a look at the economic event the family has been through and how a similar situation may be avoided in the future.

Housing counseling helps borrowers understand their financial situation better. It makes them better aware of options available to them. Once they are a part of this program, the borrower puts down just 3.5% on their new mortgage, with no premiums and fees at closing.

With a negative financial situation, times can be tough. However, with back to work mortgage lenders, borrowers can once again tread on the path of home ownership. The program ends in September of 2016. While there’s still time, borrowers must look for lenders offering this bracket of FHA loans.

If you, or someone you know has been through an adverse economic event, but are committed to getting past the financial hurdles; it is a wise decision to apply for an affordable home loan thorough the back to work program. Why wait further, if you are eligible now?

Back to Work Lending Program: Changing Dreams into Reality

As per data from Realty Trac, a foreclosure listing company, more than 4 million foreclosures were completed between January 2007 and December 2011. Towards the end of December 2011, More than double these numbers of foreclosures were in the process; approximately 8.2 million!

The housing market crash affected millions of families, forcing them to let go of their nest eggs, the homes they owned. The struggling economy is still on its way to recovery. People who have lost their homes due to a financial crisis try their best to face the situation. They are committed to paying off their debts, committed to improving their credit scores and are now re-entering the market in a much stronger position.

FHA’s back to work lending program has raised the hopes of affected families. The program, launched on August 15th of 2013, is aimed at helping creditworthy Americans who are now re-employed and wish to re-build their home.

Under this program, borrowers who have been through extenuating economic hardships can re-enter the market just a year after losing their home and obtain an FHA mortgage. Earlier, borrowers had to wait for at least three years before they could apply for a government loan. The back to work lending program has been welcomed by borrowers across America, who have found a new hope for their dream home.

However, there are certain strings attached to this opportunity! Not all borrowers can take part in the program. Let us talk about what qualifies one to benefit from this program.

Borrowers must prove their difficult economic circumstances such as a bankruptcy, short sale, deed-in-lieu or loss of employment, for at least 12 months. They must submit documented proof of their financial hardship. Also, they must show that there has been a 20% reduction in their household income, at least 6 months before they defaulted on the loan.

Further, their credit scores must be good for at least 12 months after the financial event they have been through. A minimum score of 500 is a must, however, those with no credit score can also qualify.

Last but not least, the borrowers are required to take a 1-hour counseling session from a Housing and Urban Developing (HUD) agency at least 30 days prior to filing a new loan application. This may be done over the phone, in person, or online. This counseling helps borrowers understand issues such as loan options and obligations, budgeting, and how to avoid scams; among other things.

With the back to work loan program, many individuals are now able to enter the housing market again by applying for new mortgage loans. The market is definitely seeing a greater number of buyers, with fewer homes lying vacant.

What the affected borrowers need is a helping hand that can lead them to their dream. Choosing the appropriate lender can determine how smooth the process of re-entering the market can be.

The tricky documentation work, choosing an appropriate loan amount and weighing the loan obligations can be daunting subjects for borrowers. Borrowers must work with an experienced lender who can make the complete process much simpler and faster.

Three Things To Know About The FHA’s New Home-Buyer Loans

The FHA’s affordable home-mortgage loans have a new purpose and some new rules

If you are a potential first-time homebuyer or a repeat homeowner who has faced previous financial difficulties, now is a great time to take a step into the housing market for the FHA’s new homebuyer loans.

The FHA created a program designed for anyone who has faced an economic event — any occurrence beyond the borrower’s control that results in a loss of employment or a loss of income of 20 percent or more for a period of at least six months. If you can relate, here are three things you should know about the “Back To Work” program.


1. This loan is designed for families who are regaining financial stability
“Back to Work” was launched to save families who would otherwise be turned away from lending agencies and banks. Since events like foreclosure and bankruptcy stay on a borrower’s credit history for up to seven years, most lending agencies don’t want to risk the chance of a negative event happening again. However, the FHA has recognized that an economic event does not determine whether a borrower can fully recover and repay a loan. The program reduces the long waiting period after losing a home to only 12 months. Normally, families have to wait several years. The program also allows borrowers to put only 3.5 percent down with no premiums or fees at closing.

2. Prospective borrowers must be able to provide proper documentation
Lenders will offer a second-chance mortgage to almost any borrower who qualifies. To be eligible, each person who is signing the loan must be able to provide the lender with proper paperwork that shows proof of a past economic event. The family must also meet general requirements in terms of employment, income and credit. To begin, make clear copies of each signer’s driver’s license and social security card. Gather other necessary items, such as 30 days worth of recent pay stubs, tax returns, W-2 forms, and bank statements. Your statements should include all of your checking and savings accounts, any 401K and other stock accounts. Also be sure to gather the proper documentation for other additional income, such as child support, alimony, Social Security or a pension award. Your lender will need to see all of these items, and possibly a few others, to determine if the “Back to Work” program is right for your situation.

3. The FHA requires participants to complete one hour of housing counseling
For borrowers to become eligible for the FHA’s affordable home-mortgage loans, lenders ask prospective borrowers to complete housing counseling at least 30 days, but no more than six months prior to submitting a loan application. Counselors are required to address the cause of the economic event to ensure borrowers know how to avoid making the same mistakes twice. They also help families create and assess a household budget and teach them how to avoid scams. The overall goal of counseling is to better prepare families for future financial shocks and instill good financial habits.

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.

Back to Work Mortgage Lenders Look for Ready Borrowers

Three steps to take before talking to home mortgage lenders

As of August of last year; the Federal Housing Administration (FHA) has offered a new mortgage option for families who have faced extenuating circumstances. Back to Work mortgage lenders allow families who have faced foreclosure, bankruptcy, short sale and other significant economic events to apply for a new loan only 12 months after losing a home. During that waiting period, there is much that can be done to better prepare families for a new mortgage.

1. Raise your credit score
Although it’s easier said than done, raising your credit score could make a significant difference in whether a lender will consider you a “good risk.” For lending agencies, the more creditworthy you are, the more likely you will be able to make payments on time. The Back to Work home loan does not allow credit scores below 500. To ensure you will be accepted, setup payment reminders in your online banking system. A text message or e-mail will remind you when upcoming bills are due. You could also consider setting up automatic payments, which will debit payments straight out of your account on the date you wish. Paying bills on time is the most contributing factor in boosting your credit score. Decreasing how much debt you owe is another important factor. Create a payment plan in which you pay off your highest-interest cards first, while continuing to maintain minimum balances on your other accounts.

2. Attend housing counseling
The Federal Housing Administration requires borrowers to participate in at least one hour of housing counseling. This must be completed a minimum of 30 days but no more than six months prior to submitting a new mortgage application. Although borrowers typically frown upon counselors, it can be an enlightening and empowering experience to learn how to take control of your financial life. Counselors teach borrowers how to become better prepared for future financial shocks and how to avoid scams, among many other insightful topics. The FHA requires counselors to address the cause of a family’s economic event. The agency must be approved by the U.S. Department of Housing and Urban Development. A list of participating agencies can be found at www.hud.gov.

3. Assess your budget
Determining how much money you can spend each month on mortgage payments is an important step before a family begins home shopping. Begin by making a budget, listing different household categories and how much they cost each month. Items like food, car insurance, gas, Internet, cell phones and childcare should all be included. Small purchases, like birthday gifts and movie tickets, can add up quickly if you are not budgeting how much is being spent. Each time you make a purchase, add it into a written spreadsheet or excel file to keep track. Subtract all of your monthly expenses from your monthly income to determine what kind of a mortgage you can afford. Don’t forget to leave money for savings, too.

Clarifying New Back to Work Lending

An explanation of the “Back to Work” loan’s confusing terms

On August 15th of last year, the Federal Housing Administration relaxed its guidelines for borrowers who have “experienced periods of financial difficulty due to extenuating circumstances,” according to Mortgagee Letter 2013-26.

The terminology throughout the mortgagee letter isn’t written for regular folks. Many of the terms used to describe the Back to Work - Extenuating Circumstances program could cause interested families to shy away. However, the program isn’t as complicated as it may seem.

The FHA is considering those who can document an economic event, which the administration defines as “any occurrence beyond the borrowers control that results in loss of employment, loss of income, or a combination of both, which causes a reduction in the borrower’s household income of 20 percent or more for a period of at least six months.”

In other words, an economic event can be foreclosure, short sale, deed-in-lieu, loan modification, forbearance agreement, Chapter 7 bankruptcy or Chapter 13 bankruptcy. If you can provide documents that show when and where employment was lost, you should be eligible.

Throughout the letter, the term “borrower” includes both the main borrower as well as the co-borrower. Anyone who signs a mortgage is considered a borrower. A “household member” is a person who lived at the borrower’s residence during the economic event and was a co-borrower on the previous mortgage.

The “onset of an economic event” is the date in which the event occurred. This date also starts a family’s waiting period, the length of which is decided by the FHA lending agency. New “Back to Work” lending allows families to apply for a new mortgage only twelve months after losing a home. Normally, the waiting period after foreclosure and short sale is three years, and two years after bankruptcy.

Recovering from a significant reduction in credit from an economic event can take up to seven years. Through “Back to Work,” recovering families have a second chance to refinance. However, credit scores below 500 are not eligible for the program.

To be eligible for a Back to Work loan program, you must have a 12-month credit history that is clear of late housing, installment debt payments, delinquency and other derogatory credit issues. The letter defines this as “satisfactory credit,” meaning you are a good risk to lenders if the guidelines are met.

Borrowers are also required to attend “housing counseling,” which is a one-hour session with a U.S. Department of Housing and Urban Development approved agency. Counselors help borrowers create a household budget and teach them how to avoid making the same financial mistakes twice. The cause of the economic event must be addressed during counseling.

Recovering from an economic event is a long-term process, but the “Back to Work” program is available to help the millions of Americans who are facing financial hardship. Don’t let the mortgagee letter’s confusing terminology turn you away. Speak with a mortgage and lending expert in person or online for more information.

Raise Your Credit For The Back to Work Mortgage Loan

A “Back to Work” home mortgage requires satisfactory credit; are you eligible?

The “Back to Work” mortgage loan has been in full swing since August of last year. Millions of Americans are now eligible to apply for a new home mortgage loan if they have faced an extenuating circumstance as a result of the housing market crash of 2008.

A “Back to Work” home mortgage requires satisfactory credit, which takes a significant hit after an economic event. Credit scores below 500 are not allowed in the program, but borrowers with no credit score remain eligible. Having satisfactory credit proves you are good risk to lending agencies, meaning you have a higher probability of repaying your mortgage on time — exactly what agencies are looking for. Use the following tips to guide your credit score in “Back to Work’s” direction.

Make payments on time
Although it sounds simple, the most defining factor in your credit score is whether your payments are made on time or not. The Back to Work program requires a 12-month credit history that is clear of late housing, installment debt payments, delinquency and other derogatory credit issues. Set up payment reminders with your online banking system. The reminder will send you a text message or e-mail notifying when your payment is due.

Don’t pollute your credit report
Instead of using a bunch of different cards for small amounts, have a go-to credit card. If you have multiple credit cards with small balances, pay them off. Your score will consider how many different cards have balances. However, don’t panic and cancel all of your cards — that can hurt your score, too.

Keep good debt
Many borrowers believe that old debt appearing on their credit report diminishes their score; this is actually false. If you have debt that you handled well and paid back on time, keep it on your credit report. The longer the history of good debt, the better your credit score is. This proves to lenders that you are a good risk that will be able to make payments on time. Negative debts will disappear from your credit report after seven years, but adding a history of good debt is not harmful.

Don’t obsess over the number
Making quick significant changes in your credit usage usually indicates risky behavior. Lending agencies want to know that you will be able to repay your Back to Work mortgage in stable increments. If you are denied credit, the lender is required by law to show you the credit report it used to make its decision (Dodd-Frank Wall Street Reform and Consumer Protection Act). Be responsible for your bills and don’t obsess over your credit score. If you make smart financial decisions, the number will revive itself. If you remain concerned, speak with a credit expert on how to handle your specific credit history.

Will Back to Work Program Lenders Think You’re At Good Risk?

Lenders follow procedure to determine if borrowers are eligible for new home mortgage loans

An economic event like foreclosure, short sale or bankruptcy gives borrowers a handful to worry about. Recovering from extreme credit issues is a long process that takes years to amend. What’s more stressful then wondering if a new mortgage lender will consider you creditworthy, or in other words, a good risk?

Mortgage lenders carefully inspect the backgrounds of each of their loan applicants. Lending money to buy a home is a long-term risk that should not be taken lightly, especially with prospective borrowers who have histories of negative economic events. Although borrowers are obligated to make loan payments on time, that is not always the case, especially when a borrower has a poor credit history.

Even though the Federal Housing Administration’s Back to Work program is designed for families with previous financial hardships, lenders continue to look for satisfactory credit in their borrowers. This implies that borrowers with late housing, installment debt payments, delinquency and other derogatory credit issues are not accepted into the program.

The mortgage process usually begins with a lending representative interviewing the prospective borrowers face-to-face, online or by phone. Many lenders will offer loans to eligible families before they ever shop for a new home. This option allows borrowers to have an idea of how much money they have to work with, thus saving them time and preventing disappointment. Borrowers should be sure to bring their bank account numbers, credit card bills, pay stubs, W-2 forms and other proof of employment history.

The most important document during this process is the loan application. The application will give your lender the opportunity to assess your risk value and creditworthiness for a new mortgage. There will be questions about your income, liabilities, credit, assets and the home you wish to buy.

Once a lender is able to prove a borrower’s eligibility, the lender will analyze the risk of lending to establish an appropriate interest rate and loan term. There is no standard or formula for offering rates, but most lenders follow the rates of government-related agencies.

Back to Work program lenders allow borrowers to put down only 3.5 percent on a new loan with no premiums nor fees at closing.

If it’s possible to offer you a loan, lenders typically do what they can to make it happen. However, “Back to Work” program lenders do not want to approve a loan where the borrower will have late payments and eventually become delinquent. The best thing you can do while you’re waiting is to boost your credit score. Your local mortgage expert will be able to provide tips on how to raise credit while in your specific situation.

Back to Work Program Lenders

Did you have a past financial hardship (lost job, reduction in income, etc.) that caused you to lose your home?  If you had a foreclosure or declared bankruptcy but are now regaining your financial stability feel encouraged.  A new home may be in your near future!  You may qualify for a new home loan under the Federal Housing Administration Back To Work Program.  The Federal Housing Administration (FHA) recognizes that many homeowners struggled with unemployment or wage reductions as a result of the recent recession.  These extenuating circumstances made borrowers unable to meet their monthly mortgage payments.  Unfortunately the result was they ultimately lost their homes.  If this situation describes you be reassured.  The new Back to Work Program allows borrowers to purchase a new home 12 months after the previous foreclosure or bankruptcy.    

1st Alliance Lending is a Back to Work Program Lender that will work closely with you to help you navigate your options for returning to home-ownership.  We will guide you every step of the way.  

1st Alliance Lending can help you determine if you meet the FHA loan requirements which include documenting the mortgage issues you experienced that were caused by the financial hardship, showing that you have rebounded and re-established your credit, and completing housing counseling.  To verify that you have re-established your credit you need to pay your rental payments on time for 12 months and not be 30 days late on more than one other loan payment.  The housing counseling course is approved by the Department of Housing and Urban Development (HUD).  The course counselor will work closely with you to verify your ability to afford the mortgage, help you establish your household budget and explain the loan application process and mortgage insurance.  This will help insure success with your new home.

1st Alliance Lending takes pride in helping borrowers obtain mortgages they can afford long term.  We frequently work with borrowers who have had a financial hardship and are re-entering the housing market.  We want to help you have a successful mortgage long into the future.  Contactus if you would like to find out more about the Back to Work program.

The Back to Work Lending Program Changes the Future of Mortgages

What happened in 2008 and what the Back to Work loan program is doing now

When a dramatic rise of mortgage delinquencies and foreclosures began to spark in 2007, the housing market had no path of return after many financial institutions closed their doors by Sept. of 2008. Housing experts note that the crash’s main cause was sub-prime lending; this is referring to loan arrangements with high interest rates for borrowers with poor credit histories.

From 2004 to 2006, sub-prime mortgages rose from 8 percent to 20 percent, according to the University of North Carolina’s Department of Statistics. Over 90 percent of sub-prime mortgages in 2006 were adjustable rate, meaning its rate will change in accordance with the market’s conditions. By 2007, adjustable rates began to reset with higher interest rates, causing higher monthly payments for borrowers. The number of mortgage delinquencies began to soar and global investors became uninterested in purchasing mortgage-related securities.

Borrowers began to dramatically change financial paths, applying for foreclosure, short sale, deed-in-lieu, forbearance agreement, loan modification, Chapter 7 bankruptcy and Chapter 13 bankruptcy. The Federal Housing Administration (FHA) now calls each of these financial situations “economic events,” which happen in result of a loss of employment or income of 20 percent or more for a period of at least six months.

After five years of battle, the FHA developed the “Back to Work - Extenuating Circumstances” program to help recovering families. Traditionally, lending agencies required borrowers to wait several years before applying for a new mortgage loan after an economic event. Through the program, families may apply for a new mortgage only 12 months after losing a home. Borrowers may put down 3.5 percent on a mortgage with no premiums nor fees at closing.

Lenders must be able to verify and document a borrowers’ loss of employment or income through a written document that shows evidence of a termination date or where a prior employer is no longer in business.

Interested borrowers are required to complete housing counseling, which is a one-hour session with an expert approved by the U.S. Department of Housing and Urban Development. Counseling must address the cause of the economic event and may be completed in person, online or by phone.

Mortgagee Letter 2013-26 states, “Housing counseling is an important resource for both first-time home buyers and repeat home owners.”

The Back to Work lending program also requires all borrowers to have a satisfactory credit history for at least 12 months. Credit scores below 500 are not allowed in the program, but borrowers with no credit score remain eligible. Late housing, installment debt payments and delinquency negatively affect a borrower’s eligibility.

Distressed families still looking for a new home mortgage can contact a lending agency that offers the Back to Work loan program. The program runs through Sept. 30, 2016.

The Back to Work Lending Program Supports New Homebuyers

The two most beneficial tips for recovered home-buyers back in the market

The Back to Work loan program has made it possible to apply for a new mortgage only 12 months after an economic event. After a situation like bankruptcy or foreclosure, it can be frightening to begin the move from an apartment or another shelter, to a house that you can call your own. Here are two often-forgotten ideas that will make your transition smoother.

1. What is your budget?

This may seem like a silly question, but many families don’t know what they can afford. It is easy to overestimate what is affordable when each living cost is yet to be pieced together.

Earnest money is the deposit made on a home after a family submits an offer. This proves to the seller that you are serious about buying the house. A down payment is an initial and partial payment made at the time of settlement. The Back to Work lending program allows borrowers to put down only 3.5 percent on a new mortgage.

As soon as you move in, there will be other factors to consider as well, like heating and cooling, water and electricity. Don’t forget other living expenses, such as food, internet, cable, car insurance, fuel and cell phones.

To avoid making the same mistakes twice, families should have a back-up plan for handling the loss of employment or income. If the main provider lost his or her job, would the family be able to continue paying the mortgage? Does the family have a sufficient savings plan?

Calculating these numbers can become complicated and stressful, which is why most families avoid budgets. However, it becomes much easier when families keep track in an Excel file or other documenting program. “Back to Work” lending program participants are required to complete at least one hour of housing counseling, in which the counselor can help create or assess a household budget.

2. Create a “wants” and “needs” list.

Although a fireplace, a finished basement or backyard pool sound great. Extra wish-list items only make homes more costly, especially when there are other financial factors to consider. Your family’s needs should be your first priority.

Location is key. Consider how close your desired location is to your job, your children’s school and the supermarket. Look into whether public transportation is an option and if the garage will fit your family’s vehicle. Some neighborhoods have strict rules about parking on the street, fencing and sheds.

Townhouses, condominiums and duplexes will each have different ways of landscaping and disposing of garbage. Creating a list of what will be truly beneficial to your family will narrow your choices down to the perfect home that will make the “Back to Work” loan program a successful one.

Finding the Best Home Mortgage Loans after a Short Sale

If you have previously gone through a short sale you are not closed off from obtaining a new home loan. You just have to make sure that you meet the necessary requirements that have been set up by the FHA. This is regardless of whether or not at the time of the short sale you were delinquent or current on you payments. In the event that you were not delinquent you will find that your application is favorably considered. In order to qualify for the best home mortgage loans under these circumstances you will need to have a 12 month record of mortgage payments made in time before the short sale. You will also need to show that the creditors you pay in installments were also settled within 12 months.

One of the things that are important to note when you are applying for this loan is that the FHA does not just take note of how well you paid off your mortgage, but on how well you did on your other debts as well. With the new back to work program, many who have gone through a short sale may get a respite even though they were not able to pay off their other debts sufficiently or in time. This program is a lot more lenient than the previous ones.

In order to qualify for this program after your short sale you will need to show proof that you had lost your job or your source of income such as a business that had suffered. The circumstances leading to this loss need to be out of your control. You will also need to take a counseling class on home ownership. If you skip this important requirement your loan will be denied. This housing counseling only takes an hour and is therefore not tedious. Every person asking for a loan under this program is handled as an individual to ensure that they get time to speak up and discuss the events that caused the short sale and how they have recovered from the said economic downturn.

If you follow the FHA’s guidelines, you can find some of the best home mortgage loans. You will, however, need to ensure that you have all of your ducks in a row. Paperwork such as your W2’s and tax returns need to be part of the application as proof of your economic event. If you had to shut down your business you will need proof of that as well. For those who were fired from a job, your letter of termination will be important. With this documentation get a qualified underwriter who will do a good job of filing the application so that you can get the money you need to purchase your dream home.

New Home Buyer Loans to Choose From

It is time for you to buy a new home, in fact you have been thinking about it for a while now. The time is right. You have looked at your goals and worked through the amount of money you have. You can afford a mortgage and there are many different types available. There are several kinds of new home buyer loans available and all you have to do is pick one.

One type of mortgage that is available to you is a fixed rate mortgage. This one is popular because the borrower tends to be protected from hikes in the amount of money they pay from one month to the next. It is a straight forward mortgage. The advantages of this kind of home loan include its stability. You know what you need to pay every month for both the principle as well as the interest. The amount remains the same for the duration of the loan repayment. In addition, whether the interest goes up or not, the payments do not change.



This is something to think about even as you make your decision. This kind of loan makes sense when you are making plans to live in the same house for many years or when you want to work with a strict budget. When you know what the amount you are required to pay per month is, you can make plans with ease.

If you have had an economic event that has adversely affected your finances you would need to consider a back to work loan as your first one. This loan allows you to make a new start if you have had some financial challenges in the past. It is among the new home buyer loans but can also be taken out by those who have owned a home previously and lost it. If you have suffered foreclosure, forbearance, bankruptcy, a short sale or anything of that sort you can get a loan that will allow you to own a home again.

This loan is a great idea because the down payment can be as low as 3.5% and the interest rates are not any higher than those of a regular loan. One of the things you will need to prove before you can get such a loan is that you suffered an economic event and you were a responsible debtor. With such information you are simply reinstated back to the place that you were before.

You will, however, need to prove that you have recovered from the economic event that affected you. Make sure you have a source of income and your credit history is clean for a period of 12 months.

Looking for a Back to Work Mortgage Loan? Read This First

If you are shopping for a back to work mortgage loan, you will need to show your lender that you are in economic recovery. Having been through an economic event such as foreclosure, deed-in-lieu, short sale or bankruptcy, there is certain proof that you will need to provide in order to qualify for a loan. This should not cause you any alarm, however. Just read on and find out what the requirements are.

To begin with you will need to prove that the credit impairments attached to your Social Security Number were because of an economic event that was beyond your control. In addition, you will need to prove that your household income was severely affected. The event could be that you lost your job or other source of income. You will also need to show that you have recovered fully financially from the adverse economic event. Finally you will need to go through HUD housing counseling so as to qualify to move into the next step of the process.


FHA back to work program by 1stalliancelendingllc

In order to prove that you are in full economic recovery you will need to show that your credit history is on the up and up. That means that you are well able to pay your housing costs on time and that you are not making your payments in installments. If you have revolving accounts you will also need to show that you are paying those on time. With 12 months of satisfactory payments, you will have passed one stage of the qualification process for the back to work mortgage loan. If you have a loan modification it is important to show that you are making your payments in a timely fashion and in full.

The other requirement that must be met is one that qualifies your situation to be termed as an economic event. That means that you will need to show that the reduction of household income was 20% or more than that. This loss must have been experienced for at least 6 months in order for you to qualify for a back to work home mortgage. In order for these requirements to be met it is important that you provide the necessary documentation for purposes of underwriting as well as loan approval.

The documents you will be required to produce will include confirmation that your income was reduced by at least 20% for at least six months. You will also need to show proof of loss of income or employment. Proof of this will be in your W2s as well as your tax returns. You may also be required to produce documents showing that you closed your business or an employment termination letter. Be sure to have all your documentation in place so that you can present them as needed for the success of your loan application.

FHA Launches Back to Work Program

Mortgage lenders work with housing market crash victims

The 2008 housing market crash created millions of foreclosed homes alongside millions of families in negative financial situations.

The Federal Housing Administration (FHA) released Mortgagee Letter 2013-26 on August 15 of last year, which 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 to pre-foreclosure sale, deed-in-lieu or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts.”



The letter brought forth FHA’s “Back to Work - Extenuating Circumstances program,” which allows families facing an unfortunate economic event to apply for a new mortgage only twelve months after losing a home.

The program waives lending agencies’ traditional three-year waiting period after foreclosure, short sale and deed-in-lieu, and bankruptcy’s traditional two-year waiting period. Borrowers may put down only 3.5 percent with no premiums nor additional fees at closing. Mortgage rates are the same as other FHA rates.

To be eligible, borrowers must be fully recovering from their economic event. “An economic event is any occurrence beyond the borrower’s control that results in loss of employment, loss of income or a combination of both, which causes a reduction in the borrower’s household income of 20 percent or more for a period of at least six months,” Mortgagee Letter 2013-26 states.

To prove a full recovery, borrowers must show at least twelve months of credit history that is clear of late housing, installment debt payments, derogatory credit issues and delinquency. Credit scores below 500 are not allowed, but borrowers with no credit score remain eligible.

Back to Work program lenders must be able to verify and document a loss of employment by receiving written verification of employment that shows evidence of a termination date or where the borrower’s prior employer is no longer in business.

Borrowers facing Chapter 13 bankruptcy who have yet to be discharged must gain written permission from the Bankruptcy Court to begin a new mortgage. Such document is to be given to their lending agency.

Another way FHA is working with “Back to Work” borrowers is by requiring one hour of housing counseling. The counselor must be approved by the U.S. Department of Housing and Urban Development and address the cause of the economic event.

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

Back to Work Lending Program Waives Waiting Periods

Families battling foreclosure, bankruptcy and other events are ready for a new mortgage with the “Back to Work” loan program


FHA back to work program lender by 1stalliancelendingllc

Last August, the Federal Housing Administration (FHA) began sharing their support for families facing unfortunate economic events. The administration launched a program that waives lending agencies’ traditional three-year waiting period after foreclosure, short sale, and deed-in-lieu, as well as the two-year waiting period after bankruptcy.

The Back to Work lending program is designed for families facing an economic event, which the FHA defines as “any occurrence beyond the borrower’s control that results in loss of employment, loss of income or a combination of both, which causes a reduction in the borrower’s household income of 20 percent or more for a period of at least six months.” This applies to everyone in the household, not only the borrower.

To verify a loss of employment, lending agencies must obtain a written document that shows evidence of termination or where the borrower’s prior employer is no longer in business.

Borrowers that have yet to be discharged from Chapter 13 bankruptcy must gain permission from the Bankruptcy Court before beginning a new mortgage, which also must be verified by lending agencies.

The program’s popularity derives from the housing market crash of 2008, when millions of families lost their homes after becoming unable to repay their mortgages. Now, these borrowers may put down only 3.5 percent on a new mortgage with no premiums nor additional fees at closing.

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

To become eligible for the program, borrowers must complete at least one hour of one-on-one housing counseling in person, by phone or online. The counseling must be completed a minimum of 30 days, but no more than six months prior to submitting an application. The U.S. Department of Housing and Urban Development provides applicable agencies on its website, www.hud.gov.

The FHA’s letter states, “Housing counseling enables borrowers to better understand their loan options and obligations, and assists borrowers in the creation and assessment of their household budget, accessing reliable information and resources, avoiding scams, and being better prepared for future financial shocks, among other benefits to the borrower.”

Housing counseling also gives borrowers a better idea of how to obtain satisfactory credit, which is another requirement to be eligible in the Back to Work loan program. Satisfactory credit means the borrower’s credit history is clear of late mortgage, installment debt payments, derogatory credit issues and delinquency.

If a borrower’s lending agency is not yet participating, it’s not too late to find a new one. There are participating agencies in all 50 states and the program ends Sept. 30, 2016.