FHA Changes Waitng Period After Short Sale!

Borrowers that may be otherwise ineligible for an FHA-insured mortgage due to FHA’s waiting period for bankruptcies, foreclosures, deeds-in-lieu, and short sales, as well as delinquencies and/or indications of derogatory credit, including collections and judgments, may be eligible for an FHA-insured mortgage if the borrower
 
· can document that the delinquencies and/or indications of derogatory credit are the result of an Economic Event as defined by FHA,
 
· has completed satisfactory Housing Counseling, and

· meets all other HUD requirements.

For the past several years the waiting period after a short sale, foreclosure, deed in lieu or bankruptcy has been three years with a few exceptions for medical hardships. With this new policy from FHA/HUD, a borrower who can demonstrate an Economic Event may qualify for an FHA mortgage after a waiting period of only one year.

An Economic Event is any occurrence beyond the borrower’s control that results in Loss of Employment, Loss of Income, or a combination of both, which causes a reduction in the borrower’s Household Income of twenty (20) percent or more for a period of at least six (6) months. The borrower must document the loss of income and show recovery from it.

Recovery from an Economic Event is the re-establishment of Satisfactory Credit (as defined on page 5 of this ML) for a minimum of twelve (12) months.

There are many other requirements for verification of both current status and the status at the time the economic event occurred so give us a call for a full evaluation or go to algage.com under mortgagee letter for details.
 
CLICK the Link Below for full details



 

 



 

 



 

 



 

 



 

 



 

 



 

 



 

 




 

FHA Mortgagee Letter

This letter from FHA gives all of the details of the program outlined above or you can call us for more information.