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Homebuyers Hit By Recession Have ‘Second Chance’ Mortgage Option

The Federal Housing Administration (FHA) relaxed its guidelines for borrowers who “experienced periods of financial difficulty due to extenuating circumstances.

Known as the “Back To Work — Extenuating Circumstances Program” or simply the “FHA Back to Work Program,” borrowers with a recent history of bankruptcy (Chapter 7 or Chapter 13), foreclosure, judgment, short sale, loan modification or Deed-in-Lieu of Foreclosure may apply for an FHA-insured mortgage and may be able to become a homeowner again much more quickly than ever before.

• Buyers no longer need to wait three years to apply for an FHA loan after experiencing a foreclosure, short sale or deed-in-lieu.

• In addition, they no longer need to wait two years to apply for an FHA loan after experiencing a Chapter 7 or Chapter 13 bankruptcy.

• Buyers must be able to demonstrate that they have completely recovered from the financial event and if they have, the wait time is reduced to just 12 months

Read more information on the FHA Back to Work – Extenuating Circumstances program here.