FHA Back To Work Program

Help for homeowners that lost a home due to job loss but now are back to work and want to buy a home.

As a result of the real estate market crash in 2008 and the subsequent downturn in the economy, many homeowners with prior stellar payment records on their mortgages ended up losing their homes in foreclosure or being forced to do a short sale to get out from under it.  Most of these former homeowners then became renters but have the desire to buy a home again once back on their feet.  However, depending upon just how severely their credit was impacted as well as whether they had a foreclosure, short sale or bankruptcy, they may have to wait as long as 7 years to obtain a home loan again.  

However, thanks to an FHA program called "Back to Work" there is hope for these homeowners including the opportunity to obtain a home loan again without the normal waiting period if their problems were related to a job loss and they meet certain criteria. The Back to Work program allows 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, to be eligible for an FHA-insured mortgage if the borrower meets certain guidelines, which include:

• can document that the delinquencies and/or indications of derogatory credit are the result of an Economic Event* as defined in the guidelines;
• can demonstrate that they have fully recovered** from the event;
• has completed satisfactory Housing Counseling;
• meets all other HUD requirements.

*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.

**Fully recovered includes maintaining satisfactory credit for a period of at least twelve (12) months.