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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.

Eligibility
Borrowers 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:

• Short sale
• Deed-in-lieu
• Foreclosure
• Chapter 7 bankruptcy
• Chapter 13 bankruptcy
• Loan modification
• Forbearance agreements

To qualify for the FHA Back to work Program, you must meet the minimum eligibility requirements.

• You must have experienced a negative economic event (short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification, forbearance agreement).
• You must demonstrate that your household income declined by 20% or more for a minimum period of 6 months, which coincided with the negative economic event.
• You must be able to show a full recovery from the impact of the negative economic event.
• You must complete housing counseling prior to closing.