I cannot tell you how many phone calls I have had in the past 5 business days in regards to this “new” guidance from the Federal Housing Administration. In a recent mortgagee letter HUD has released, new guidelines have been set in regards to waiting periods for foreclosures, short sales, deed in lieu and bankruptcy. A good thing? It just might be…
You may or may not like my thoughts on it, but thats ok I will apologize now. I think a lot of people are using it as a marketing ploy. Yes, it will get the phones ringing but to be honest with all of the hoops you have to jump through few will make it to the end. I know I know, I may sound like a bit of a Debbie Downer but part of my job as a Phoenix Loan Officer is setting the right expectations, don’t you agree? And if I promised this brand new amazing program was available to you and then you sat in my office and I then revealed all of the hoops you had to jump through you may want to strangle me. Well, in my opinion a lot of the advertising headlines that I have seen going around make it seem like this is a miracle to the housing market and now everybody can own a home.
Either way you look at it, I wanted to bring you the inside scoop, the low down, the skinny on this new guidance and then you can make up your own opinion about it and whether or not you would fit in the so called “box” and qualify or maybe you know somebody that would fit in the “box” and you can send them our way?
So here it is, in the new Back to Work FHA guidelines HUD will (as long as you meet the requirements and jump through the hoops) insure a loan for you allowing you to buy a home in as little as 12 months from a bankruptcy, short sale, foreclosure or deed in lieu if you meet the following requirements.
- You have an “Economic Event” which is considered beyond a borrower’s control which results in loss of employment or loss of income or both which reduces the household income of at 20% for a MINIMUM period of 6 months time.
- Household income is defined as ALL income earners residing in the household at the time of the event
- The borrower must have re-established credit with 12 months minimum satisfactory payment history
- The borrower must have attended a HUD approved housing counseling class and received a certificate a minimum 30 days prior to date of loan application but no longer than 6 months from the date of the loan application
As far as documenting the loss in income, that’s where it can get really messy. We will need to get verifications of employments for previous employers termination letters etc etc. It can be done if you meet the above criteria and I am sure this slightly grey guidance from HUD and their Back to Work FHA loan is going to cause A LOT of questions but hey that’s what we are here for.
If you think you fit into this category or know someone who may, we would love to see if we are a good match for them, fill out the form below and we will reach out and see if we can help.
-Mr. Electric Himself
Do you or someone you know qualify for this program?
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