March 30, 2015
A reader asks, “I have taken the ‘back to work’ counseling class twice. the first one expired but we found a house after it expired. Do you know if FHA can or will waive or make an exception on ‘being completed a minimum of thirty (30) days’ rule. The house is a ‘Fanny Mae’ house and is in Foreclosure. We don’t want to lose it.”
The reader is referring to an earlier blog post we wrote about the FHA’s Back To Work Program which may permit, depending on circumstances, a borrower who has experienced foreclosure, bankruptcy or some other negative “economic event” to apply for an FHA home loan once more.
According to the FHA official site, “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. To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event 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 “30 days rule” refers to a requirement that the borrower complete housing counseling a minimum of 30 days and a maximum of 6 months before submitting the new loan application.
The borrower must, “receive homeownership counseling or a combination of homeownership education and counseling provided that each participant receives, at a minimum, one hour of one-on-one counseling from HUD-approved housing counseling agencies, as defined at 24 C.F.R. §214.100.”
“The counseling must address the cause of the economic event and the actions taken to overcome the economic event and reduce the likelihood of reoccurrence. The housing education may be provided by HUD-approved housing counseling agencies, state housing finance agencies, approved intermediaries or their sub-grantees, or through an on-line course, and be completed a minimum of thirty (30) days but no more than six (6) months prior to submitting a loan application to a lender”
The FHA doesn’t list an exception to this “30 days” requirement, so it’s entirely possible the borrower would be required to retake the counseling. However, since the publication of the original Back To Work rules changes may have been made to accomodate this type of scenario, so it’s best to contact the FHA directly by calling them at 1-800 CALL FHA for clarification.
Do you have questions about FHA loan rules? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: