New FHA Program


DISCLOSURE: I am not a loan officer but I can recommend ones that I’ve worked all through the years!!  Well, just saying because my article is all about the new FHA Program.  This is currently the latest buzz in the housing market after issues of increasing interest rates, strict mortgage loan guidelines and government shut down which created cold feet again among potential buyers.  Some people wants to buy but they somewhat had foreclosures, short sales, bankruptcy, judgments, collections or other negative impact on their credit even just plain collections.  THIS IS GOOD NEWS!!!

This is called “THE NEW FHA BACK TO WORK PROGRAM.”  It basically allow borrowers to purchase a home through FHA financing who had a foreclosure, short sale, bankruptcy, judgments and collections within 12 months or later shortening the waiting period.  Here are the key factors for eligibility:  Twelve months have passed since the borrower’s hardship that resulted to delinquency and derogatory on credit report.  Loss of income should be at least 20% or more for the household.  Loss of income must be for a period of more than six months when the hardship happened.  In order to qualify, applicants should be able to prove that the credit impairment was the result of a loss of employment or a significant loss of household income beyond the borrower’s control.  This may include divorce and other hardships that were usually associated why you cannot pay the mortgage anymore.  The borrower has demonstrated full recovery from the event as timely payment on their credit cards and all bills due to having a present good job and no more derogatory record on their credit for at least the past 12 months.  The borrower has to complete the Housing Counseling and other requirements as described per HUD (Housing and Urban Development).  Visit for more detailed information of the program.
Satisfactory Credit Requirements:  The credit history is clear of late housing or installment debt payments and major derogatory credit issues on revolving account for 12 months.  If you have any current mortgage, it should show satisfactory payment history for 12 months even though you are under loan modification which maybe temporary or permanent.  Other aspects, no history of delinquency on rental housing, no more than one 30 days delinquency on payments due to other creditors and no collection account or court records reporting (other than medical and/or identity theft).
Required Documentations:  In order to prove your case; the following are most likely the lender will require from you:
Household Income – loss should be 20% or more for a period of at least six months that resulted in loss of employment, loss of income or combination of both.
Loss of Income – lender will obtain a VOE (Verification of Employment) to show proof of termination, reduction or combination of both by income of 20% or more.  A written termination notice or other public documents in case the employer is no longer in business.  It is important to prove that the derogatory credit occurred after this incident and not before any economic distressed.  For both Foreclosure and Short Sale, minimum of 12 months have passed.  **** In case or a promissory note, check with your loan officer or lender if they will accept even if the promissory note has not been paid in full and being paid on time for the last 12 months.
On Chapter 7 and 13 Bankruptcy – a minimum of 12 months have passed since the date of discharged prior to loan application and on Chapter 13 bankruptcy, all required bankruptcy payments were made on time and again, it has to be the result of the hardship described above.  If the bankruptcy was not discharge prior to loan application, the lender must also verify and document the borrower has received written permission from the Bankruptcy Court to enter in mortgage transaction.

If you are one of these people and would like to buy a house, call a lender or loan officer immediately as this program maybe perfect for you.  Most of my clients who did short sale before were asking me when they can buy another house again.  This maybe the answer to your questions.

Note:  Jocelyn Porteria is a Realtor® licensed in VA. She earned a designation of ASP, Accredited Staging Professional; ABR, Accredited Buyer’s Specialist; CDPE Certified Distressed Property and Short Sale Expert, (SFR) Short Sales and Foreclosure Resource. For more info, visit her website at  HYPERLINK "" or call her at 571-432-8335 or email at  HYPERLINK ""  for a free confidential evaluation of your property, individual situation, property value, and possible options.  


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