{"id":3162,"date":"2021-03-27T20:02:32","date_gmt":"2021-03-27T19:02:32","guid":{"rendered":"https:\/\/businessfinancenews.com\/?p=3162"},"modified":"2021-12-09T19:46:02","modified_gmt":"2021-12-09T18:46:02","slug":"fha-back-to-work-program","status":"publish","type":"post","link":"https:\/\/businessfinancenews.com\/fha\/fha-back-to-work-program\/","title":{"rendered":"FHA Back To Work Program"},"content":{"rendered":"\n

The FHA back to work program (1<\/a>) allows homeowners who have experienced foreclosure (5<\/a>), a short sale (6<\/a>) deed-in-lieu (7<\/a>), or bankruptcy (8<\/a>) to reapply for mortgage credit within 12 months (3<\/a>) (9<\/a>). The reason for your foreclosure, short sale, and so on has to have been caused by an economic event (10<\/a>) (11<\/a>), an economic downturn (12<\/a>) (13<\/a>), or even job loss (14<\/a>) (15<\/a>) as a result of the economic downturn (16<\/a>). And, a loss of income (17<\/a>) of at least 20 percent. You have to have maintained a good credit score (18<\/a>) since that time. That means that even though you may have been forced to sell your home on a short sale or into bankruptcy (19<\/a>) (20<\/a>), you have maintained good credit history, and made your payments on time (2<\/a>) (4<\/a>). Also, in order to be able to qualify under the program, the prospective borrower needs to go through counseling (21<\/a>). <\/p>\n\n\n\n

You need to have a counseling session one-on-one for at least an hour at least 30 days before you apply for a new mortgage. The FHA Back to Work program recognizes the fact that it is the economic downturn that caused the loss and not the borrower. <\/p>\n\n\n\n

The FHA realizes that, that this situation is not necessarily representative of the ability or willingness to repay the debts on time on the side of the borrower. Therefore, part of this FHA Back To Work program is to demonstrate that even though the borrower encountered this experience, the payments are still made on time. The borrower should also demonstrate a satisfactory credit history and as a result, are qualified to introduce an application for a new mortgage.<\/p>\n\n\n\n

What is the FHA Back to Work Program?<\/strong><\/h2>\n\n\n\n

The FHA Back To Work Program is a distinctive type of FHA home loan that supports prospective borrowers during a financial difficulty through the diminishing of the waiting interval to apply successfully for an FHA Loan after a bankruptcy filing, a short sale or a foreclosure has taken place.<\/strong><\/p>\n\n\n\n

The FHA Back To Work program is a mortgage loan program available via the FHA which reduces the waiting period to purchase a home after bankruptcy, foreclosure, or short sale. To qualify for the program, mortgage borrowers must meet standard FHA loan requirements<\/a>, document prior financial hardship, re-establish responsible credit history, and attend a brief homeowner counseling program<\/strong>.<\/p>\n\n\n\n

The Federal Housing Administration sponsored \u201cBack to Work \u2013 Extenuating Circumstances\u201d program is a mortgage loan counseling program designed to shorten the waiting time to buy a home for a potential borrower following a financial hardship. According to HUD<\/a>, if you have had a foreclosure, short sale, deed-in-lieu of foreclosure, or have declared bankruptcy, you may qualify for a new home loan if you are back to work and can document the extenuating circumstances. Mortgage rates remain the same as any other FHA loan. There is no premium on your interest rate and no additional fees at closing. The Back to Work Program does not affect your mortgage rate. The program is not limited by loan size. The FHA will insure up to your county\u2019s FHA loan limit.<\/p>\n\n\n\n

The far-reaching magnitude of 2008\u2019s economic downturn necessitated a change in doing business as usual. For example, home owners faced with foreclosures or short sale scenarios who previously held FHA fixed-rate mortgages would usually have to wait 36 months before purchasing another home. In 2013, the Federal Housing Administration unveiled a plan to help beleaguered homeowners known as, its \u201cBack to Work Program.\u201d It changed the long-held practice of a 36-month waiting period and now allows buyers to purchase a primary residence just 12 months after a short sale, foreclosure or deed in lieu of foreclosure.<\/p>\n\n\n\n

Minimum Credit scores are required, a score below 580 is not currently allowed, which is a standard FHA mortgage guideline, but borrowers with no credit score whatsoever are still eligible. You were also still eligible for the program if you are currently unemployed. <\/p>\n\n\n\n

The FHA discontinued its Back to Work program indefinitely<\/strong> on September 30th, 2016. Prior to being discontinued, the FHA Back to Work program offered a route to homeownership for Americans who experienced recent economic hardship, declared bankruptcy or had their previous home foreclosed on. It shortened the waiting period to apply for a loan through most lenders from 36 months to 24.<\/p>\n\n\n\n

The program waives the traditional 3-year waiting period after a foreclosure, short sale, or deed-in-lieu to apply for an FHA loan, eligible participants can buy a home in as little as one year. This program can be used for both first-time home buyers and repeat home buyer<\/em>s.<\/p>\n\n\n\n

When the Department of Housing and Urban Development announced the FHA\u2019s Back to Work program, it was very good news for any potential FHA loan applicant who may have experienced previous \u201cEconomic Events\u201d or related fiscal hardship (and\/or lowered FICO scores) as a result of the recession.<\/p>\n\n\n\n

Programs Similar To The Fha Back To Work Program<\/h2>\n\n\n\n

While there is no direct alternative to the FHA Back to Work program in 2020, homebuyers shouldn’t lose hope. The FHA grants exceptions for those with extenuating circumstances similar to those outlined in the Back to Work Program like serious illness or death of a wage earner. Otherwise, there is typically a 3-year waiting period required for those who’ve experienced a previous foreclosure.<\/p>\n\n\n\n

The waiting period for FHA loans is lenient compared to conventional lenders who usually require up to 7 years. Borrowers still need to meet the minimum credit score requirement, which is generally the lowest among all mortgage loan types.<\/p>\n\n\n\n

Difference With A Standard FHA Loan<\/h2>\n\n\n\n

The program waives the traditional 3-year waiting period after a foreclosure, short sale, or deed-in-lieu to apply for an FHA loan, eligible participants can buy a home in as little as one year. This program can be used for both first-time home buyers and repeat home buyers.<\/p>\n\n\n\n

The FHA Back to Work program was created by the U.S. Department of Housing and Urban Development to extend mortgage options to consumers with economic hardships or financial events.<\/p>\n\n\n\n

For traditional FHA loans and conventional loans, lenders required consumers to wait 36 months after an economic event like a foreclosure or bankruptcy before applying for a mortgage. The FHA Back to Work program reduced this period to just 24 months for those who qualified and could prove the extenuating circumstances that led to their financial hardship.<\/p>\n\n\n\n

FHA Back to Work Program Requirements<\/h2>\n\n\n\n

To qualify for the FHA Back to Work program, you had to be able to prove that your bankruptcy, foreclosure, short sale or other economic event was caused by extenuating circumstances.<\/p>\n\n\n\n

These extenuating circumstances could include:<\/p>\n\n\n\n