Here's good news for future buyers of Minnetonka homes for sale with recent history of bankruptcy or other financial downturns. FHA releases its "Back to Work - Extenuating Circumstances Mortgage Program". This program is applicable for FHA cases dated after August 15, 2013.
The Federal Housing Administration (FHA), a division of the Department of Housing and Urban Development, has waived its three-year waiting period for foreclosures. Borrowers with recent cases of Chapter 7 and Chapter 13 bankruptcy, deed-in-lieu, forbearance agreements, foreclosure and pre-foreclosure, loan modification and short sales can also apply and potentially be approved for an FHA insured mortgage. This latest action of FHA will surely contribute to the continuous decrease of foreclosure activities in the Minnetonka homes for sale market.
FHA has been a catalyst to the development of real estate mortgage lending in the US. It insures residential homes provided by lending businesses such as banks and independent mortgage companies from loan default. It also provides the standards for mortgage underwriting.
It is important to understand that FHA does not make loans; instead they are a preferred financing source in the US especially for financing Minnetonka homes for sale. FHA insured mortgages usually offer low down payment programs so that borrowers will be encouraged to buy homes.
Although the amount of FHA loans is limited, loans are quite generous. If a borrower unfortunately fails to make their loan payments, foreclosure will occur while FHA will pay in cash according to the limit set at the insurance agreement.
The recent changes made to FHA policies stated earlier are formulated to further achieve the program's goal of increasing home ownership, especially after experiencing the recent US real estate crash. FHA realized that a credit history is not accurate enough to determine if a person is capable or willing to pay a housing loan. There are several other factors affecting the capacity to pay that are usually beyond the person's control. This will assume an increase of people applying for FHA loans for purchasing Minnetonka homes for sale.
This is one of the reasons why you should start looking for Minnetonka homes for sale and owning one. Should you wish to know more about how this recent FHA change benefits you as a buyer and help you with your other Minnetonka real estate needs, feel free to contact us, The Exceptional Home Team.
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