FHA - Back to Work
Recover from Difficult Cirumstances
NOTE: The FHA discontinued its "Back to Work" Program as of September 30, 2016. This page is kept here for archival purposes. However, we do offer other programs with reduced waiting periods through our broker channel. Complete the contact form below for more information.
With the FHA Back to Work Program, we help people purchase a home more quickly after experiencing an "Economic Event" that caused hardship. This program provides an exception to the normal waiting periods after bankruptcy, foreclosure, short sale, deed in lieu, or other negative impact on their credit (see our Waiting Period chart).
What kind of hardship qualifies as an "Economic Event"?
An Economic Event is anything that occurs beyond your control that results in loss of employment, loss of income, or a combination of both. The loss of income must be at least 20% for a period of at least six months.
What are key requirements for FHA Back to Work?
We must document the loss of income was at least twenty percent (20%) for a period of at least six months
We must show you've made a "recovery" from the event
You must complete a HUD-approved housing counseling
The housing counseling must be completed at least one (1) month, but no more than 6 (six) months, prior to your loan application. May be completed online, in-person, by phone, or any method approved by HUD. A list of counseling agencies may be found at https://www.hud.gov.
We must show the situation at issue (bankruptcy, foreclosure, short sale, ect.) occurred as a result of the Economic Event rather than a general inability to manage financial obligations
What are some important details?
The requirement of at least twenty percent (20%) loss of income is calculated on the total income of any co-borrowers on the mortgage who resided in the household at the time of the event
The housing counseling must be at least one hour one-on-one counseling.
We must document the loss of income with bonafide evidence (such as written employment verification we can request from the employer and/or tax returns).
"Recovery" involves a twelve-month clean track record after the event that is clear of late payments or derogatory credit issues. It involves a satisfactory twelve month history of housing payments (mortgage or rental). No collections, liens, or judgments against you can have occurred during this period (except cases involving identity theft or medical).
We must document a clean history of housing payments (mortgage and/or rent) for twelve months following the event (no late payments). No more than one (1) late payment on payments due to other creditors.
FHA Back to Work Self-Guided Checklist
You must be able to answer "Yes" to all of the above questions in order to qualify for the program. These special requirements are in addition to regular qualification requirements with the exception of the traditional waiting period.
What are my next steps?
1. Get in touch with us via the form below to evaluate the potential for qualifying for this program. It's helpful if you can provide a PDF of your credit report once we respond. (This is helpful for evaluation before we take an application).
2. Get in touch with a counseling agency through https://www.hud.gov and complete the required housing counseling for Back to Work. Make sure you specify the Back to Work Program so that you receive the appropriate counseling. Let the counselor know you are working with Cherry Creek Mortgage Co., Inc.
3. After you have completed the counseling, visit the "Get Started Online" section of our website and complete the form. If you intend to PURCHASE a home, you may contact us prior to the one-month period after the housing counseling. This will allow us to prequalify you before you find your new home (the application will begin after you get an accepted offer).
NOTE: The FHA discontinued its "Back to Work" Program as of September 30, 2016. This page is kept here for archival purposes. However, we do offer other programs with reduced waiting periods through our broker channel. Some of them have similar requirements for reestablishment of good credit. Complete the contact form below for more information.
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