This program is especially designed for potential homeowners who have had a tramatic economic event such as bankruptcy, foreclosure, job loss or short sale. The parameters of this program allow a person to purchase a home under FHA guidelines with the following criteria once the event is more than one year old.
1. It must be demonstrated that the borrowers income decreased by more than 20% for at least 6 months due to the economic event.
2. It must be demonstrated that the likelihood of the event repeating itself is unlikely.
3. The potential borrower must complete home ownership counseling a MINIIMUM of 30 days prior to the loan application.
4. Recovery from the Economic Event is defined as reestablishing satisfactory credit for a minimum of 12 months.
This means that under a variety of circumstances a borrower can purchase a home 12 months after a significant economic event subject to the same guidelines for income and credit. This program may be very helpful to the many thousands of people who sustained a job loss or short sales in the past 6 years without having to wait for the preivous limit of 3 years on FHA or 4 years on conventional loans.