The FHA "Back To Work" Program Is Official

Borrowers with a recent history of bankruptcy, foreclosure, judgment, short sale, loan modification or deed-in-lieu can apply -- and get FHA-approved -- for an FHA-insured mortgage.

The FHA "Back To Work" Program Is Official

Dubbed the "Back To Work - Extenuating Circumstances Program", the FHA removed the familiar waiting periods that typically followed a derogatory credit event.

You can click here to get today's FHA "Back To Work".

If you've experienced any of the following financial difficulties, you may be program-eligible :

• Pre-foreclosure sales
• Short sales
• Deed-in-lieu
• Foreclosure
• Chapter 7 bankruptcy
• Chapter 13 bankruptcy
• Loan modification
• Forbearance agreements

The FHA realizes that, sometimes, credit events may be beyond your control, and that credit histories don't always reflect a person's true ability or willingness to pay on a mortgage.

Use the Q&A below to learn more about the FHA's Back to Work - Extenuating Circumstances program. Then, get today's FHA mortgage rates to begin seeing whether you're eligible.

The FHA Back To Work - Extenuating Circumstances Program

The FHA Back To Work - Extenuating Circumstances program is the FHA's "second chance" for mortgage applicants who have experienced financial hardship as a result of unemployment or severe reduction in income.

Yes, you can use the program as a first-time buyer.

Yes, you can use the program as a repeat home buyer.

Yes, you can use the program for an FHA 203k construction loan.

Yes, the program waives the agency's three-year waiting period. You no longer need to wait three years to apply for an FHA loan after experiencing a foreclosure, short sale or deed-in-lieu.

The program can be used by anyone who's experienced a pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification; or who has entered into a forbearance agreement.

You can apply for an FHA Back to Work - Extenuating Circumstances mortgage with any FHA-approved lender. The mortgage approval process is the same for any other FHA-insured mortgage. 

Mortgage rates are the same as mortgage rates for any other FHA loan. There is no premium on your interest rate, nor are there additional fees to pay at closing. Your mortgage rate will be unaffected by the FHA Back To Work program.

If your current lender is not participating in the FHA Back To Work program, you can find another lender. If you don't know of another FHA-approved lender, you can get a mortgage info here and see what you think.

In order to qualify, you must meet several minimum eligibility standards. The first is that you must have experienced an "economic event" (e.g.; pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification, forbearance agreement). The second is that you must demonstrate a full recovery from the event. And, third, you must agree to complete housing counseling prior to closing. You must also show that your household income declined by 20% or more for a period of at least 6 months, which coincided with the above "economic event".

In order to document a 20% loss of household income, you must present federal tax returns or W-2s, or a written Verification of Employment evidencing prior income. For loss of income based on seasonal or part-time employment, two years of seasonal or part-time employment in the same field must be verified and documented as well. Income after the onset of the economic event, which should represent a loss of at least 20% for at least six months, should be verified according to standard FHA guidelines. This may include W-2s, pay stubs, unemployment income receipts, or other. Your lender will help you determine the best method of verification.

Your lender will review your credit report as part of the FHA Back To Work approval process. All accounts will be reviewed -- ones which went delinquent and ones which remained current. Your lender will attempt to determine three things -- that you showed good credit history prior to the economic event; that your derogatory credit occurred after the onset of the economic event; and, that you have re-established a 12-month history of perfect payment history on major accounts. Minor delinquencies are allowed on revolving accounts.

The "20 percent loss of income" eligibility condition applies to everyone in the household. If one member of the household lost income as the result of a job less but the household income did not fall by 20 percent or more for a period of at least months, the borrower will not be FHA Ba Extenuating Circumstances-eligible.

Via the program, you can buy a home 12 months after a foreclosure.

Via the program, you can buy a home 12 months after a short sale.

Via the program, you can buy a home 12 months after a deed-in-lieu of foreclosure.

Via the program, you can buy a home 12 months after filing for Chapter 13 bankruptcy.

Via the program, you can buy a home 12 months after filing for Chapter 13 bankruptcy.