The Federal Housing Authority (FHA) has a new program which will stay in effect until September 30, 2016. This program offers homeowners who have lost their homes due to short sales, whose homes have been sold in foreclosure, or who have given deeds in lieu of foreclosure back to financial institutions, a second opportunity to purchase a home. In the past, if a consumer lost their home related to a foreclosure case, they would have to wait thirty-six months before they could apply for a new FHA loan. However, under this new program, they would only have to wait twelve months after a foreclosure sale or a short sale to apply for a new FHA loan as long as they can document the financial issues that caused them to lose their prior home.
Reduction in Income
If the prospective homeowner can show that they had a loss of income of twenty percent or more for a minimum of six months prior to the loss of their home, it will help them qualify under this new program.
Credit Score
Under the new FHA program, the homeowner will need a credit score with a minimum of 640. In the event the prospective homeowner could not meet this credit score requirement, they must go through a HUD approved counseling agency concerning the issue of home ownership and residential mortgage loans.
The homeowner should be aware that supporting documentation with regard to any financial issues, hardships, illness, loss of employment or other problems that caused the individuals to lose their initial home must be fully documented. A letter explaining the situation will not be sufficient to qualify for this new FHA program.
Conclusion
FHA is extending themselves to homeowners and giving them a second chance that has never previously been offered to families who have lost their homes.
Elliot S. Schlissel is a foreclosure defense lawyer. Elliot and his staff of attorneys represent individuals and families throughout the Metropolitan New York area whose homes have been foreclosed upon by financial institutions and mortgage companies. Elliot assists his clients in mortgage modifications. In addition, Elliot brings lawsuits against financial institutions who have broken laws, failed to obtain proper assignments and who do not have standing to bring their foreclosure lawsuits. Elliot has an unparalleled record of success in keeping his clients in their homes after foreclosure proceedings have been initiated against them.
