FHA Back To Work Program Eliminates Seasoning on Bankruptcy, Short Sale, and Foreclosure

An FHA loan program that is flying under the radar since August 2013 can help many previous homeowners who were a victim to the recession, or experienced unemployment or other severe reductions in income, a second chance in obtaining a home loan, without having to wait the standard 2 -3 years, if they have filed a bankruptcy, or experienced a short sale or foreclosure. The program is called the “FHA Back To Work Program.”  Many retail banks do not have this program offered, so you will want to seek out a Colorado Mortgage Broker like myself.

FHA recognizes the hardships that many of these borrowers faced, and realize that their credit history may not fully be a reflection of their true ability to pay back a mortgage. This is a huge stride in lending, and many wholesale lenders have this program in Colorado. To be considered for this program is not as difficult as you might think. What needs to have happened is an “economic event” in your life, and you will need to document the following:

• Certain Credit Impairments were the result of a Loss of Employment or more then a 20% drop in household income beyond the borrowers control.
• The borrower has demonstrated full recovery from the event.
• The borrower completes a housing counseling class

This would be an FHA loan, so the max LTV would be 96.5%, or simply 3.5% down. These loans are available with credit scores down to a 580.

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