FHA announces shorter waiting periods to buy a house after short sale, foreclosure, and bankruptcy
For Immediate Release
Effective August 15th FHA has announced a waiver to policies regarding the waiting periods on obtaining a new FHA mortgage. This could impact millions of Americans positively. However, please understand that with any policy change announcement ALL investors that we lenders work with HAVE to roll out the changes. So this doesn’t mean they investors (folks who take your mortgage payments) will participate or immediately change their underwriting guidelines. My advice, take notice, and watch for more information.
So how does this work? Basically right now with an FHA loan if you had a bankruptcy, short sale, foreclosure, deed-in-lieu of foreclosure, you are required to wait until you are eligible to get a new mortgage. Each of which trigger their own waiting period. And if there are more than one situation, you have to clear each events specified waiting period separately.
How this will impact folks?
It will allow you to potentially re-enter the housing market sooner than previously allowed. Mind you even with the changes there is a STILL a waiting period in place of 12 months.
Requirements, how do I know if it applies to me ?
- Evidence there was a Loss of Employment, Loss of Income, combination of both, which resulted in a loss of HOUSEHOLD income by 20% or more, for at least 6 months
- Household income = ALL household members residing at the primary residence at the time of occurrence and was a co-borrower of the previous mortgage
- There has been a recovery (re-establishment of credit) for a minimum of 12 months
Meaning, there are requirements, and they won’t look loosely at the situation when you apply. So be ready to document, document, document your situation. Be ready to provide supporting documentation. Be ready to have a thorough background ready for the lender you choose to work with. Be prepared!
You will be required to participate in Housing Counseling ( at least 30 and no more than 6 months prior to applying for a mortgage).
**A list of agencies can be obtained online at http://www.hud.gov or by calling 1 (800) 569-4287****
Now, remember that this policy change was announced, but will still require that the servicers/investors we lenders work with roll it out and accept the change. As with all FHA guides, the servicers ultimately make the final call with what policies FHA rolls out.
If you would like more information , please research the FHA policy: FHA Back to Work. From there, watch our website as we will be announcing as we find the servicers begin to participate in this policy change.
To your success~
Ray Williams | Branch Manager | Summit Mortgage Denver | 303-779-0591 |email@example.com