March 19, 2015
A reader asks, “my husband property was forclosed on out of his control of his job moving to a different state can we try to by if we havent waited 2 years”
This reader question doesn’t provide quite enough information to give a specific answer. FHA loans after a foreclosure are possible, but much depends on whether the borrower had an FHA home loan or not, and the borrower’s credit history following the foreclosure activity.
Here’s what FHA loan rules in HUD 4155.1 Chapter Four Section A say about attempting to get an FHA loan after a previous home purchased with an FHA mortgage was foreclosed upon:
“If the borrower has had past delinquencies or has defaulted on an FHAinsured loan, there is a three-year waiting period before he/she can regain eligibility for another FHA-insured mortgage. The three-year waiting period begins when FHA pays the initial claim to the lender. This includes deed-in-lieu of foreclosure, as well as judicial and other forms of foreclosures. ”
As you can see, that language is fairly inflexible. However, the FHA Back To Work program may be able to help–this is a program that permits borrowers in certain circumstances (with the approval of a participating FHA lender) to apply for a new FHA loan. This program is not for all borrowers, only those who have qualifying circumstances.
Here’s what the FHA official site says about Back To Work:
“Borrowers that may be otherwise ineligible for an FHA-insured mortgage due to FHA’s waiting period for bankruptcies, foreclosures, deeds-in-lieu, and short sales, as well as delinquencies and/or indications of derogatory credit, including collections and judgments, may 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 this ML,
–has completed satisfactory Housing Counseling, as described in this Mortgagee Letter, and
–meets all other HUD requirements.”
Talk to a loan officer about the FHA Back To Work program to see what your options are or contact the FHA directly for more information about Back To Work by calling their toll-free number: 1-800 CALL FHA.
Do you have questions about FHA loans? 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.
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