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.