New FHA Program Seeks to Return Foreclosed Borrowers to Homeownership

New FHA Program Seeks to Return Foreclosed Borrowers to Homeownership.

That’s good news for borrowers who lost their home due to specific financial hardships but can now demonstrate they have regained previously lost financial ground. The list of eligible financial hardships reads like a list of housing crisis woes:

• Chapter 7 or Chapter 13 bankruptcy

Deed-in-lieu

Forbearance

• Foreclosure

Loan modification

• Loss of income, employment or both that totaled at least 20 percent of previous earnings for at least six months – including copies of applicable termination notices or changes in employment status

Pre-foreclosure sales

Short sales

Additionally, consumers must also meet other verifiable measures to participate in the program:

• Proof of borrower’s current income – usually W-2 forms or federal tax returns that show the desired mortgage would be affordable and sustainable;

Credit history before and after the eligible hardship event that is free from late payments or other major credit issues, including rental housing payments and accounts delinquent by 30 days or more;

Credit score of at least 500;

• Housing counseling by a HUD-approved counselor at least 30 days but no more than six months before submitting an FHA application.

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This website is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans.

**Download Fair Housing Booklet – CLICK HERE

All approvals and rates are not guaranteed, and are only issued based on standard mortgage qualifying guidelines.

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