Conventional loan applications taken on August 16th 2014 - Fannie Mae will require 4-Year waiting period regardless of the down payment. The 4-year waiting period is waived to 2 years if borrowers can prove that the event leading up to the short sale was due to extenuating circumstances. Freddie Mac will also provide its approval after 2 years of short sale date IF borrowers can demonstrate extenuating circumstances such as income reductions due to loss of jobs, serious illness or death of a wage earner that are beyond their control that ruined their credit. Both Fannie Mae and Freddie Mac require applicants to show 12 months of solid credit behavior and participate in a HUD approved housing-counseling programs.
FHA follows the same as Freddie guidelines and If you can qualify under FHA's back to work initiative - you can obtain FHA financing with 3.5% down in as little as 1 year instead of current 3 years. FHA further stipulated that there must be at least 20% decreased in income for at least 6 months that contributed to their delinquency. Borrowers must be able to demonstrate that they are now back to work paying their bills on time for the last 12 months after the short sale and earning enough to qualify for a new FHA-insured mortgage. Borrowers need not be current 12 months prior to the short sale. Borrowers must attend 1 hour HUD approved housing-counseling programs. This program will be manually underwritten and borrowers need to meet all requirements per the Mortgagee Letter 13-26.
Short sale, Deed-in-lieu or foreclosure- What you should know.
Thanks to Consumer Financial Protection Bureau (CFPB), FHA has agreed to end its controversial full-month interest policy on its loan that has been paid off. This new policy is for future borrowers starting Jan. 21st 2015. Until then - if you a seller or refinancier paying off an FHA loan - insist that your closing date is as close to end of the month as possible. Thus reducing in paying accrued interest on loan that you've paid off.
This FHA loan program allows borrowers who were harmed financially due to loss of a job and/or a decrease in earnings of 20% or more that lasted 6 months or more. If the borrower can meet the criteria of the FHA Back To Work – Extenuating Circumstances Program, they could be eligible to obtain FHA mortgage financing after re-establishing good credit for 12 months after a short sale or foreclosure.
EligibilityBorrowers must be able to document the circumstances and event that was beyond their control due to loss of employment or significant loss of income and must have recovered from the event (including reestablished satisfactory credit for a minimum of 12 months). HUD is also looking for a satisfactory credit history prior to the event.
You may be eligible for the FHA Back to Work program if you have suffered the following:
To qualify for the FHA Back to work Program, you must meet the minimum eligibility requirements.
Everyone is unique. Complete the form below and I will contact you personally.