Back to Work home loan requirements

The FHA and “Back to Work” mortgage lenders agree to set up home loan requirements

Beginning a new home loan can be an intimidating task because it seems there is so much to worry about. There are mortgage rates, premiums, fees at closing, waiting periods and credit requirements. Many lenders turn families away if their situation isn’t up to par.

Fortunately, the Federal Housing Administration (FHA) stepped in last August to make beginning a new home loan easier for the fearful. Back to Work mortgage lenders cut down extensive waiting periods, which can be up to three years. Through the program, borrowers can begin a new loan only 12 months after losing their home.



The program is designed for families who have faced an unfortunate economic event, such as foreclosure, deed-in-lieu, short sale, bankruptcy or any other financial downturn that significantly affects a household’s income.

“An economic event is any occurrence beyond the borrower’s control that results in loss of employment, loss of income or a combination of both, which causes a reduction in the borrower’s household income of 20 percent or more for a period of at least six months,” Mortgagee Letter 2013-26 states.

In the program, mortgage rates are the same as any other FHA loan and borrowers may put down only 3.5 percent on a new mortgage with no premiums nor other fees at closing.

The FHA requires at least one hour of one-on-one housing counseling, which allows borrowers to receive more information on their loan options, obligations and how to set up a household budget.

Housing counseling must be approved by Housing and Urban Development and must address the cause of the family’s reduction in income. Counseling is to be completed a minimum of 30 days, but no more than six months prior to beginning a new loan.

“Housing counseling is an important resource for both first-time home buyers and repeat home owners,” Mortgagee Letter 2013-26 states.

Another requirement by the FHA is satisfactory credit, where many may begin to cringe. As long as the borrower’s credit history is clear of late housing and installment debt payments, and the borrower’s credit score is above 500, there shouldn’t be anything to worry about. If a borrower has no credit score whatsoever, he or she remains eligible.

And if a borrower is facing Chapter 13 bankruptcy and has not yet been discharged, he or she must obtain written permission from the Bankruptcy Court to begin a new Back to Work home loan.

Mortgagee Letter 2013-26 states, “FHA is continuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.”

How to get a Back to Work mortgage loan after losing a job

The FHA’s “Back to Work” home mortgage promises a more stable financial future

Losing a job is tough in our economy — there are car payments, cell phone bills, the rising cost of gas, and most importantly, house payments. No family wants to worry about losing where they call home, and for those that have, it’s devastating.

August 15 of last year, the Federal Housing Administration (FHA) launched its Back to Work mortgage loan, in which borrowers facing an unfortunate economic event can apply for a new home mortgage loan only 12 months after losing a home.

The FHA defines an economic event as “any occurrence beyond the borrower’s control that results in loss of employment, loss of income or a combination of both, which causes a reduction in the borrower’s hold income of 20 percent or more for a period of at least six months.” This applies to everyone in the household, not only one member.

To verify a loss of employment, the lender must receive a document evidencing the termination or loss of business.

The Back to Work home mortgage waives lending agencies’ traditional two or three year waiting periods and replaces them with only 12 months. Instead of waiting around, borrowers can now look for a new home and mortgage almost immediately.

However, the FHA does place some requirements. To be in the program, borrowers must agree to attend at least one hour of one-on-one housing counseling. The counseling must address the cause of the economic event, as well as enable the borrower to better understand loan options, obligations and how to manage money in his or her home.

Counselors assist borrowers in creating a household budget, as well as provide tips on avoiding scams and better preparing for future financial shocks.

The counseling must be Housing and Urban Development approved and completed between 30 days and six months prior to submitting a new mortgage application. This may be completed in person, via telephone or online. A list of participating agencies can be found at www.hud.gov.

“Housing counseling is an important resource for both first-time home buyers and repeat home owners,” the FHA said. “FHA is continuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.”

Another requirement is satisfactory credit. This means the borrower’s credit history must be clear of late housing and installment debt payments. Credit scores below 500 are not allowed, but borrowers with no credit score are eligible in the program.

If your current lender is not taking part in “Back to Work” home mortgage, it’s not too late to switch. The program does not end until September 30, 2016. Once in the program, borrowers may put down only 3.5 percent on a new mortgage with no premiums nor additional fees at closing.

1st Alliance Lending, LLC from David Horgan

Mortgage restructure might be in your future

The housing market crash of 2008 devastated millions of families, many of which are still in battle. Job loss, foreclosure, short sale, bankruptcy, among other financial crises left mortgagees under the dust, behind on billing statements and in a search for a more promising monetary life.

Fortunately, the government recognized this problem last August. During a speech in Phoenix, President Barack Obama said, “We should give well-qualified Americans who lost their jobs during the crisis a fair chance to get a loan if they’ve worked hard to repair their credit.”



The “Back to Work - Extenuating Circumstances” lending program does just that — across the United States, the mortgage restructure offers a second chance by allowing families to apply for a new mortgage only 12 months after losing their home.

The Federal Housing Administration’s Mortgagee Letter 2013-26 states, “FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

Those in the program do not face premiums nor additional fees at closing. In fact, the program is designed for families afraid of complex loan processes and those who have been turned down by other banks. Lenders are making it easy for those with negative credit histories.

To apply, borrowers must first have a home mortgage lender that offers the Back to Work program. Secondly, the family must be demonstrating a full recovery from at least one type of financial crisis, including prior foreclosure, prior short sale, bankruptcy, deed-in-lieu, loan modification or forbearance agreement.

Borrowers must agree to attend at least one hour of one-on-one housing counseling, required by the FHA. Mortgagee Letter 2013-26 states, “Housing counseling enables borrowers to better understand their loan options and obligations, and assists borrowers in the creation and assessment of their household budget.”

Still struggling and searching for a shorter waiting period? Looking for a more promising mortgage restructure? A home mortgage lender offering the “Back to Work” program is waiting to help.

Why you should consider Back to Work mortgage lenders

 Recovering from a home crisis? Switch lenders for the “Back to Work” home loan

The housing market crash of 2008 definitely left its mark, as millions of families are still financially recovering. This past August, the Federal Housing Administration (FHA) launched the Back to Work home loan, giving these folks hope and a chance to financially reestablish. However, not all mortgage lenders have jumped on the FHA’s train, leaving many families behind. If you’re stuck in the dust, here’s why you should consider “Back to Work” mortgage lenders.

“Am I eligible?”
According to Mortgagee Letter 2013-26, a family experiencing deed-in-lieu, prior foreclosure, bankruptcy, prior short sales or forbearance agreements is eligible to apply for this program. The family has to qualify for the program by demonstrating recovery from their financial crisis. The Federal Housing Administration insures mortgage loans in all territories of the US, in all 50 states, as well as in the District of Columbia – you are sure to find one close to your place.



“How will the program help me?”
The program aims to help families that are trying to gain financial steadiness to qualify for a new mortgage program without long waiting periods – just 12 months after home loss. After you’re accepted into the Back to Work program, you need not have to incur a premium on your interest rate nor extra fees at closing. Families have to meet with a housing counselor, who will advise on buying a home, credit issues, reverse mortgages and foreclosure avoidance.

“Will the program help my credit score?”
After unfortunate financial events, some families face a credit drop of up to 250 points. Although this can be disheartening, however, re-entering the real estate market and applying for the loan is worth it. Once you are in the program and making on-time monthly payments, your credit score will gain a boost. Also, a housing counselor can offer credit-boosting advice.

Extenuating circumstances, one-time occurring events that are beyond a borrower’s control, results in a sudden and prolonged significant fall in income or a catastrophic surge in financial obligations. Financial crises are not always your fault and you deserve a way out. If your family has begun financial recovery, consider how “Back to Work” mortgage lenders can help.

New “Back to Work” lending program helps borrowers regain financial stability

The “Back to Work” loan program launches to save families from repeating the same mortgage mistakes twice

The new “Back to Work” lending program is designed to ensure successful home-ownership for families who have previously had financial hardships. Launched in August, the program may save millions of families who continue to suffer from the housing market crash of 2008, offering a second chance and brighter future.

One beneficial key factor in the program is that families may now apply for a new mortgage only 12 months after losing their home. The program waives the two-year waiting period after experiencing a Chapter 7 or Chapter 13 bankruptcy. The lessened waiting period will allow families to get back on track sooner, as long as they can prove they’re demonstrating full recovery from their financial loss.

Most families in the program face prior foreclosure, but some also face prior short sales, loan modification, deed-in-lieu, forbearance agreements and even bankruptcy. Mortgagee Letter 2013-26 specifies who in eligible in what circumstances.

If you are dealing with foreclosure or short sale, you first need to apply to the Back to Work loan program with a Federal Housing Administration approved lender. After acceptance, there will be neither a premium nor an additional fee at closing. You will also need to attend housing counseling, where you will receive advice on buying a home and credit issues among other helpful guidance. Mortgage companies typically recommend that your monthly mortgage payment does not exceed 28 percent of your gross income.

Rebuilding credit may seem frightening, but the new Back to Work lending program gets borrowers back on track. Paying a monthly house bill will boost your credit, which makes buying a home a great place to begin financial reconstruction, especially with the support of a housing counselor. Since families must demonstrate they are becoming financially stable before program acceptance, your credit score will start to revamp itself.

Almost any family that has had a financial crisis can apply for the lending program. If your current lender does not participate in the new “Back to Work” lending program, finding a new lender will not be difficult. There are insured loans in all 50 states, all U.S. territories and in the District of Columbia. More than ever, mortgage companies are ready to help any family still suffering from the housing crash; your new financial life starts now.

Financial Lenders – Offering Sustainable Lending Products

The dream of home-ownership and the ability to provide a safe and loving place for a family is a common hope for many. Reaching that dream can be a challenging and confusing journey. Navigating financial adversity and endless requirements for obtaining a loan can be a very frustrating process, which is why many reach out to lending firms for guidance.

It is important to find the right lending company to suit your needs. Most firms determine home mortgage loan eligibility based on credit scores, so if you have a less than perfect financial history, you will need to be mindful to reach out to a lending firm that considers more than a 3-digit credit score when determining whether or not to extend you a loan.

There are a few companies that give weight to an individual’s history, unique circumstance, and drive to overcome adversity and get back on their feet. These firms consider things like; what caused your financial trouble in the first place, are you successfully paying your bills now, and have you begun to re-establish financial stability. They pledge to be your lending partner and recommend a home mortgage loan that is right for you now and for the long term in order to set your up for success.

For first time buyers, this is an especially important relationship. Finding the right home mortgage lender who will guide you to a loan that makes sense for your situation increases the chances that you will be able to maintain your loan and build a secure future for your family.

These types of lenders truly can help you turn your dreams into reality.  

Homeowners Can Look Beyond Credit Scores

“Home is a place you grow up wanting to leave, and grow old wanting to get back to.” - John Ed Pearce

A hand to hold onto and a heart to listen to you, is what we expect when we visit a lending company during financial crisis. The fear of denial lurks in our minds but a ray of hope takes us to lending companies expecting words of wisdom, empathy, guidance to give us a second chance.

Owners planning to refinance a home mortgage often face challenges, especially if they have low credit score, below 620. The common practice is to approve loans on the basis of credit scores. Doors are open for homeowners with high credit scores. However, for people with low credit scores, the scenario is different.

• Common Reasons for Low Credit Score

Some of the common reasons for low credit score are:

• Late or missed bill payments
• High level of current debt
• Bankruptcy or foreclosure
• Missed credit card payments
• Recently closed credit card

• Effect of Low Credit Score

Homeowners or people, who have lost their homes and wish to buy a new one, find it difficult to find financing when they have a low credit score. Lending companies reserve prime loans for applicants having high credit scores. Sub-prime loans are offered to people with low credit scores. The loans have low teaser rates, high fees and high prepayment penalties. However, the process is not as rosy as it seems. There are hidden facts that applicants are not aware of. Initially, the low teaser rates attract homeowners trying to minimize monthly payments. However, in course of time, the interest rate goes up. Eventually, homeowners who default on loans can lose their homes built with dreams, aspirations and toil.

There are some lending companies that believe in the philosophy of empathy, to help borrowers during crisis. With housing market recovering at a rapid pace, increase in household wealth can be projected. This will be beneficial in home mortgage financing. There are companies offering mortgage and lending options to help borrowers sustain the crisis. Instead of focusing on numbers, they take a customized approach to hear out the problem of buyers, get an idea about the current financial status of the borrower and offer a suitable plan to lead way to their dream home.

Homeowners or people aspiring to make an abode for themselves can look beyond the three digit number.