Those who have suffered a foreclosure may return to home ownership faster thanks to a new U.S. Department of Housing and Urban Development guideline.
In August the United States Department of Housing and Urban Development (often referred to as HUD) instigated the Back to Work – Extenuating Circumstances program, a program that in part would allow many of those who experienced a prior foreclosure to see their wait cut by as much as 12 months to once again participate in home ownership through an FHA-insured mortgage.
Previously it was required by HUD that those with a prior foreclosure wait 36 months before becoming eligible for a mortgage that was insured by the Federal Housing Authority, however that number has been decreased to 24 months if the prospective buyers meet specific criteria.
In order for those interested in receiving a FHA-insured mortgage within 24 months of completing a foreclosure proceeding or for those who may have been a part of a short sale or bankruptcy, the following criteria must be met:
- Documentation of credit problems a result of loss of employment
- Proof that significant loss of household income was beyond the homeowner’s control
- A full recovery from the event has been made and proof provided
- Completion of housing counseling
In return the HUD program only extends to September 30, 2016 and is for primary residences not secondary households or investment properties. Many believe that this program is in response to the rate of delinquent mortgage loans reaching levels that are historically normal.
You can download the PDF from HUD directly to learn moreor apply.