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What is the FHA “Back To Work” Program?

April 28, 2014

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On August 15, 2013 The Federal Housing Administration’s Announced “Back to Work – Extenuating Circumstances” mortgage loan program shortens the waiting period to buy a home to as little as one year after you’ve had a bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale. You do need to know the rules and guidelines in order to qualify. Read Mortgagee Letter 2013-26 http://portal.hud.gov/hudportal/documents/huddoc?id=13-26ml.pdf

To re-establish credit you must have a 12 month record of on-time rental housing payments with no delinquencies, and not have been 30 days late on more than one non-housing loan payment. If you still have any open collection or judgment accounts, then a “capacity analysis” will be done to see if you can repay those creditors.

FHA is continuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.

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 a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.

To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that:

  • certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control;
  • the borrower has demonstrated full recovery from the event; and,
  • the borrower has completed housing counseling.

Housing counseling is an important resource for both first-time home buyers and repeat home owners. Platinum Mortgage Company will advise you on how you would obtain the training to obtain the certificate.  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. FHA will consider you for eligibility if you had a financial hardship in the past but can now document the following circumstances about yourself:

  1. You meet FHA loan requirements
  2. You can document the mortgage or credit problems resulted from a financial hardship
  3. You have re-established a responsible credit history
  4. You have completed HUD-approved housing counseling

Platinum Mortgage Company will first have to determine if you meet the FHA loan requirements before you can apply for a FHA loan under the Back to Work program. You will need to explain how the financial hardship was something beyond your control that reduced your income or caused you to lose employment. If your household income dropped by 20% or more for at least six months, it may count for this type of financial hardship. Apply online www.pmccanhelp.com and follow the steps for the application process. One of our representatives will contact you within 24 hours to advise you on the next step for your mortgage loan approval.

Read more about our loan programs by clicking here.

Email us your loan scenario at info@pmccanhelp.com or if you have questions about Hard Money Loans, give us a call at 800-385-3657.

Visit Our Website: http://www.pmccanhelp.com/

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