FHA slashes time to new mortgage post foreclosure/ short sale/ bankruptcy

                       
Aug. 19, 2013
The Federal Housing Administration (FHA) is making it easier for once-struggling homeowners to qualify for a mortgage backed by the agency.

For borrowers who meet certain requirements, the FHA is trimming to one year the amount of time that homebuyers must wait after a bankruptcy, foreclosure or short sale before they may qualify for a FHA-backed mortgage.

The waiting period had been two years after the completion of a bankruptcy and three years after a foreclosure or a short sale.

But only certain consumers who’ve been in those circumstances will be able to meet the criteria attached to the eased restrictions. Borrowers must be able to show their household income fell by 20 percent or more for at least six months and was tied to unemployment or another event beyond their control. They also must prove they have had at least one hour of approved housing counseling and, among other things, have had 12 months of on-time housing payments.

“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,” said FHA Commissioner Carol Galante, in a letter to mortgagees announcing the changes.

FHA-backed mortgages are a popular option for first-time buyers and for consumers with lower credit scores who might not otherwise qualify for a loan backed by Fannie Mae or Freddie Mac. However, the agency has recently increased the fees tied to FHA-backed loans. Chicago Tribune

Comments

Post a Comment

Popular posts from this blog

Image
  3 Reasons We’re Definitely Not in a Housing Bubble Home values appreciated by about ten percent in 2020, and they’re forecast to appreciate by about five percent this year. This has some voicing concern that we may be in another housing bubble like the one we experienced a little over a decade ago. Here are three reasons why this market is totally different. 1. This time, housing supply is extremely limited The price of any market item is determined by supply and demand. If supply is high and demand is low, prices normally decrease. If supply is low and demand is high, prices naturally increase. In real estate, supply and demand are measured in “ months’ supply of inventory ,” which is based on the number of current homes for sale compared to the number of buyers in the market. The normal months’ supply of inventory for the market is about 6 months. Anything above that defines a buyers’ market, indicating prices will soften. Anything below that defines a  sellers’ market  in which pr
Read more
Image
  The Luxury Market Is Attracting Buyers in 2021 As more people continue to identify their changing needs this year, some are turning to the upscale housing sector for more space or finer features. In their most recent  Luxury Market Report , the  Institute for Luxury Home Marketing  (ILHM) shares: “In a snapshot of 2020,  despite the devasting effects of the coronavirus pandemic, the luxury real estate market has seen one of its strongest years since 2008 . In comparison to experts’ predictions in early 2020, it is remarkable how significant demands for property type, location, and amenity preferences have changed amid the pandemic.” With more opportunities to work from home and a growing interest in having extra space for things like virtual school, working out, and cooking more meals, the desire to own a home that can meet these needs continues to increase. Additionally, record-low mortgage  rates  are creating opportunities for homebuyers to stretch their legs into higher price poi
Read more