by Gagner | Aug 22, 2013 | Buyers, Real Estate News
Good news for many that are still trying to recover from personal financial crisis due to the housing market crash—the FHA is reducing the amount of time a borrower must wait in order to receive an FHA-insured mortgage. According to a new mortgagee letter from the Dept. of Housing and Urban Development, eligible borrowers (including those who experienced unemployment or other economic setbacks and lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure) can now receive an FHA-insured loan in as little in one year as opposed to the previous three. FHA is now considering borrowers who have experienced significant economic set backs and can document that: Certain credit impairments were the result of a loss of employment or a significant loss of Household Income beyond the borrower’s control; The borrower has demonstrated full recovery from the event; and, The borrower has completed housing counseling. The guidance in the mortgagee letter is applicable to purchase money mortgages in all FHA programs, with the exception of Home Equity Conversion Mortgages. The guidance in the mortgagee letter is applicable to purchase money mortgages in all FHA programs, with the exception of Home Equity Conversion Mortgages For Borrowers who are still ineligible for an FHA-insured mortgage due to FHA’s waiting period for bankruptcies, foreclosures, deeds-in-lieu, and short sales, as well as bad credit (including collections and judgments) may still be eligible for an FHA-insured mortgage if the borrower: Can document that the delinquencies and/or indications of derogatory credit are the result of an economic event as defined in the mortgagee letter, Has completed satisfactory housing counseling, as described in this ML,...
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