Back to Work program forgives borrowers with bad credit history

A bankruptcy, foreclosure, or short sale should keep you from getting a mortgage any time soon, right?

Wrong.

The Federal Housing Administration (FHA) is releasing a program called Back to Work Program.  It will help people that have had trouble in the past with bankruptcy, foreclosures and short sales that now are back to work and recovering.  

Who qualifies for Back to Work lending?

The FHA program is for people that have had an economic event that was beyond their control.  The administration asks that future borrowers prove the event was due to a loss of at least 20% of their income for at least six months.

Here are some of the events that would qualify a borrower:

• Pre-foreclosure sale
• Short sale
• Deed-in-lieu
• Foreclosure
• Chapter 7 bankruptcy
• Chapter 13 bankruptcy
• Loan modification
• Forbearance agreement

The FHA will forgive the borrower’s history after the drop in income is documented and a one hour counseling session is completed.

Borrowers have the same benefits of other FHA back loans.  There is the 3.5% down payment and the interest rates are no different than any other FHA product.

For more information contact your lender or contact me.

It's worth noting that the loans are otherwise written with the same standards as any other FHA loan. Borrowers can buy a home with as little as 3.5% down, and interest rates are no different than any other FHA product. The general idea is that borrowers shouldn't be penalized for an event outside their control.

A link to: What is an FHA mortgage
A link to: Back to work mortgage

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.