What are the minimum eligibility requirements of the FHA Back To Work program

Ever since our last blog post
Can you Buy a House 1 year after a short sale or foreclosure?
https://easymauirealestate.com/Blog/Can-you-buy-a-house-one-year-after-a-foreclosure-short-sale-or-deed-in-lieu

Yes! Is the answer.
But we have had a lot of emails with questions.
So  . . . Howard Dinits R(B)
Your Maui Real Estate Specialist
Is here to help YOU.

Call Your Real Estate Agent in Maui.
Howard Dinits R(B) 808-874-0600
or email Howard today

If this is your first purchase or your 50th Howard DINITS of Dinits Realty in Hawaii will guide you through the buying process.

You are not alone. Other people have the same questions as YOU  . . .

What are the minimum eligibility requirements of the FHA Back To Work program?

In order to qualify, you must meet several minimum eligibility standards. The first is that you must have experienced an “economic event” (e.g.; pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification, forbearance agreement). The second is that you must demonstrate a full recovery from the event. And, third, you must agree to complete housing counseling prior to closing. You must also show that your household income declined by 20% or more for a period of at least 6 months, which coincided with the above “economic event”.

How do I document a 20% loss of household income for the FHA?

In order to document a 20% loss of household income, you must present federal tax returns or W-2s, or a written Verification of Employment evidencing prior income. For loss of income based on seasonal or part-time employment, two years of seasonal or part-time employment in the same field must be verified and documented as well. Income after the onset of the economic event, which should represent a loss of at least 20% for at least six months, should be verified according to standard FHA guidelines. This may include W-2s, pay stubs, unemployment income receipts, or other. Your lender will help you determine the best method of verification.

How do I document a “satisfactory” credit history since my “economic event” for the FHA?

Your lender will review your credit report as part of the FHA Back To Work approval process. All accounts will be reviewed — ones which went delinquent and ones which remained current. Your lender will attempt to determine three things — that you showed good credit history prior to the economic event; that your derogatory credit occurred after the onset of the economic event; and, that you have re-established a 12-month history of perfect payment history on major accounts. Minor delinquencies are allowed on revolving accounts.

Does the “20 percent loss of income” eligibility condition apply to me only, or to everyone in the household?

The “20 percent loss of income” eligibility condition applies to everyone in the household. If one member of the household lost income as the result of a job less but the household income did not fall by 20 percent or more for a period of at least months, the borrower will not be FHA Back to Work – Extenuating Circumstances-eligible.

Is the FHA Back To Work Program limited by loan size?

No, the program is not limited by loan size. The FHA will always insure up to your area’s local FHA loan limit.

With the FHA Back To Work Program, how soon until I can buy a home after foreclosure?

Via the program, you can buy a home 12 months after a foreclosure.

With the FHA Back To Work Program, how soon until I can buy a home after a short sale?

Via the program, you can buy a home 12 months after a short sale.

With the FHA Back To Work Program, how soon until I can buy a home after a deed-in-lieu of foreclosure?

Via the program, you can buy a home 12 months after a deed-in-lieu of foreclosure.

With the FHA Back To Work Program, how soon until I can buy a home after Chapter 7 bankruptcy?

Via the program, you can buy a home 12 months after filing for Chapter 13 bankruptcy.

With the FHA Back To Work Program, how soon until I can buy a home after Chapter 13 bankruptcy?

Via the program, you can buy a home 12 months after filing for Chapter 13 bankruptcy.

Is there a counseling requirement in order to use the FHA Back To Work program?

Yes, in order to the use the program, you must agree to attend housing counseling.

Why do I need to take housing counseling?

The housing counseling required by the FHA Back To Work program will address the cause of your economic event, and help you consider actions which may prevent reoccurance.

How long is the housing counseling session I am required to take?

The housing counseling required will typically last one hour.

Do I have to take housing counseling in-person?

No, you do not have to take the housing counseling in-person. Housing counseling may also be conducted by phone or via the internet.

If I complete counseling, am I automatically approved for the FHA loan?

No, you are not automatically approved for the FHA loan if you complete the housing counseling required. You must still qualify for the FHA mortgage based on Federal Housing Administration mortgage guidelines.

What is the minimum credit score requirement for the FHA Back To Work program?

There is no minimum credit score requirement for the FHA Back To Work program, necessarily. The program follows standard FHA mortgage guidelines. Credit scores below 500 are not allowed, but borrowers with no credit score whatsoever remain eligible.

Are modified mortgages eligible for FHA Back To Work?

Yes, modified mortgages are eligible.

Are loans on a payment plan eligible for FHA Back To Work?

Yes, loans on a payment plan are eligible.

I lost my job because my employer went out of business? Does this qualify for the program?

Yes, job loss resulting from an employer going out of business is Back-to-Work eligible. Your lender will ask you to provide a written termination notice or publicly-available documentation of the business closure.

Can I use Unemployment Income receipts to document that I was out of work?

Yes, you can use Unemployment Income receipt to document that you were out of work.

I am unemployed. Can I still use the program?

Yes, you can use the FHA Back To Work program if you are unemployed.

I am still in Chapter 13 bankruptcy. Do I need the court’s permission to enter into the mortgage?

Yes, if your Chapter 13 bankruptcy has not been discharged prior to the date of your loan application, you must have written permission from Bankruptcy Court to enter into the purchase transaction.

When does the FHA Back To Work – Extenuating Circumstances program end?

The FHA Back To Work – Extenuati
ng Circumstances program ends September 30, 2016.

Want More FHA Back To Work – Extenuating Circumstances Information?

The FHA Back To Work – Extenuating Circumstances program is live, and ready. Millions of U.S. homeowners who experienced financial difficulty under extenuating circumstances are now eligible to purchase new homes.

I know you will have quite a few questions.
Do not panic.

Call Your Real Estate Agent in Maui.
Howard Dinits R(B) 808-874-0600
or email Howard today
If this is your first purchase or your 50th Howard DINITS of Dinits Realty in Hawaii will guide you through the buying process.

Not sure where to start?
Please contact one of our approved service providers.

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