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.

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.