Tuesday, December 17, 2013

FHA "Back to Work" Mortgage Helps Buyers Return to Home Ownership

If you previously lost a home to foreclosure, or experienced a bankruptcy or short sale, there's good news: you might be able to buy a home again, sooner than expected!

A new mortgage loan program by the Federal Housing Administration paves the way for a return to home ownership. This is great news for Fountain Hills real estate!

The "Back to Work" mortgage program is designed for prior homeowners who experienced foreclosure, or other adverse action, because of a temporary income loss. This is not a miracle cure for every situation - but it should help a significant number of people. Here are the basic requirements:

  • Documentation to prove the cause of the income loss. 
  • Loss of income must have been involuntary in nature. 
  • The income loss must have accounted for at least 20% of household income. 
  • The income loss must have lasted for at least six months.  
  • Proof that your income has recovered enough to afford a new mortgage.

The lender will review your credit history before and after the income loss period. They will be checking to see if your credit was good before the income loss - and if the income loss caused the foreclosure, bankruptcy, or short sale. There are a couple more requirements:

  • Credit history must show no late payments during the past 12 months.
  • You must complete housing counseling through a HUD-approved agency. The counseling can be completed in person, by telephone, or through online sessions.

The standard FHA mortgage conditions also apply. While the Back-to-Work mortgage program shortens the timeline to return to home ownership - it doesn't shorten the mortgage process! However, it gives former Arizona homeowners a good opportunity to buy a home again, before home prices and mortgage interest rates climb further.

Let me provide you with professional guidance for our Fountain Hills real estate market! As your  Accredited Buyer Representative, I will refer you to trustworthy mortgage lenders, and help you throughout the home buying process. I have helped Arizona home buyers for over 30 years, and I'd like to help you too!

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