FHA Shortens Waiting Period Requirement
Until just recently, if you filed a bankruptcy or lost a home to foreclosure or completed a short sale, the FHA had a fairly lengthy waiting period for you to be eligible for FHA financing for the purchase of another home. If you filed a Chapter 7 bankruptcy, you would have had to wait for two years after it was discharged. If you did a short sale or were foreclosed, you would have to wait three whole years before you could get another FHA loan.
Now, however, those rules have changed. Under the new Back to Work – Extenuating Circumstances Program, you only have to wait one year if you qualify. Do you qualify? Here are some of the criteria:
1. You must have had significant (20% or more) reduction in household income for at least six month, resulting from loss of employment or some circumstance beyond your control. This qualifies as an “Economic Event”.
2. Your lender must determine that your earlier financial and credit issues were based on the Economic Event, and that you have now recovered.
3. Your credit must be satisfactory for at least the last 12 months.
4. You must have completed housing counseling.
A new home might be closer than you think!