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Health & Fitness

FHA made new home-buyer loans easy

The country is yours when it comes to buying a new home – the “Back to Work – Extenuating Circumstances” program is offered in every area of the U.S.. You may be looking for a new career after loss of employment or a higher-paying job after prior foreclosure or short sale. Many are terrified while looking for a new home loan after a previous one failed, but there’s new hope. Since August 15, the Federal Housing Administration (FHA) made new home-buyer loans easy when they took away extensive waiting periods for those recovering from financial hardship.

According to the Bureau of Labor Statistics, the U.S. unemployment rate was 7.3 percent in October of this year, still 2.9 percent higher than October of 2006. Clearly, millions of families are still suffering from the housing market crash. Many continue facing prior foreclosure, prior short sales, and bankruptcy, deed in lieu, forbearance agreements and home loan modifications. Many families are asking, “Where do we begin to get out of this mess?”
     
New homebuyer loans are the simplest way to begin through the “Back to Work – Extenuating Circumstances” program because the FHA threw out extensive waiting periods. Borrowers may now apply for a new loan only one year after losing a home. During, that one year, though, the family must be proving a full recovery from their financial crisis. This means the borrower’s past twelve months of payment must be clear of late housing and installment debts, according to Mortgagee Letter 2013-26.

While the FHA is giving families new home-financing opportunities, the administration also wants recovering borrowers to learn from their previous hardships. That’s why potential “Back to Work” program borrowers are required to complete some one-on-one housing counseling. The counseling must be conducted in person, by telephone or Internet for at least one hour. It also must be approved by Housing and Urban Development, a state finance housing agency or an intermediary.
 
Most counselors give advice on foreclosure avoidance, boosting credit and reverse mortgages. The FHA requires that the counselor addresses the cause of the borrower’s economic event, an idea crucial for families to reach full recovery. Life may take unexpected financial turns, but refinancing is learning how to cope with them. Full recovery is possible if you’re working in the right lending program, like “Back to Work.”
 
Some borrowers may face the challenge of finding a bank that will work with their situation. Not all banks are willing to lend to families with financial crises in fear that it’ll happen again. However, many lenders are beginning to hop on board with the “Back to Work” program, because borrowers must prove they are fully recovering.

A low credit score may lead one to believe mortgage lenders wouldn’t give out new home-buyer loans, but the low score gives lenders an opportunity to get a family’s life back on track with what is one of life’s necessities – a home.

Ashley Smith has experience in writing on financial lending. He has been writing on various topics such as, new home-buyer loans and Back to Work loan program.

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