New FHA Guidelines for Financial Hardships (Back To Work)

August 30, 2013 Marc Edelstein FHA mortgages in Michigan, Michigan Foreclosures, Michigan Mortgage Banker, Michigan Mortgage Lender, Mortgage News, Mortgage Tips, Oakland County Mortgage Banker, Wayne County Mortgage Banker 0 Comments

New FHA Guidelines for Financial HardshipsIn a continuing effort to help people rebuild their lives after the great recession, HUD released new guidelines this week which open up the availability for borrowers to qualify for an FHA loan after a “economic event.” Under previous guidelines, to be eligible for an FHA loan, you needed to wait 3 years after a foreclosure,  short sale (pre-foreclosure sale),  or deed-in-lieu of foreclosure, and 2 years from the discharge date of the bankruptcy, before applying for a new FHA mortgage. With the new guidelines, however, borrowers can now qualify for a loan only 12 months after any of these events, so long as they can show there was an economic hardship, as defined by HUD below,  they complete housing counseling by a HUD Approved Counseling Agency, and they have reestablished their credit.

An economic hardship, or economic event, is any event beyond the borrower’s control which resulted in either a loss of employment or a loss of income, and which caused the borrower’s household income to reduce by at least twenty percent for a period of at least six months. If such an event occurred and you are interested in purchasing a new house, please contact a qualified loan officer immediately to discuss when you will be eligible to purchase a new home.

If you do qualify for the new guidelines based upon an economic event, you will need to complete housing counseling before applying for a new loan. It is for this reason that I recommend getting the process started as early as possible. The class is run by a licensed third party, who reports your completion directly to HUD.

If you think you might qualify under the new FHA guidelines for an economic event exemption, please contact me for next steps on reestablishing your credit, signing up for housing counseling, and beginning the application process. If you have anything to add about the new FHA guidelines, please leave a comment.

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