Have you heard about FHA's new program which will allow homeowners who have had a bankruptcy, shortsale or foreclosure to purchase, once again, after only one year?
This is great news for homeowners who, prior to this, had to wait at least three years before purchasing a home with a government-backed loan.
As with most things that seem too good to be true, there is a catch.
1) Borrowers must be able to prove true financial hardship caused the bankruptcy, shortsale, or foreclosure.
This means a loss of at least 20% of their income for at least 6 months was sustained due to reasons
beyond their control.
2) Borrowers must be able to prove that their income has had a full recovery.
3) Borrowers must have maintained clean credit history since hardship (i.e., no late payments).
3) Borrowers must attend housing counseling.
All in all, I still think this is great news for people having gone through bankruptcy or foreclosure for reasons beyond their control.
Time will tell if lenders will be receptive to FHA's new program.
Jana Haren
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