Help After Financial Hardship

FHA Back to Work Program

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Unfortunately, FHA has not renewed this program, so it is currently unavailable. Check back for updates. CHES, Inc. offers a HUD Approved, Fast-Trac counseling session that meets FHA Back to Work Program requirements.

Under the new federal program called “Back to Work – Extenuating Circumstances”, if you have had a foreclosure, short sale, deed-in-lieu of foreclosure, or have declared bankruptcy you may qualify for a new home loan if you are back to work and can document the extenuating circumstances. We’re here to help you complete the program qualifications.

What You Receive

  • Fast scheduling, call today and reference Back to Work: 816-533-7417.
  • A detailed budget and action plan to help manage your household finances.
  • Immediate delivery of your certificate of completion to you and your lender.
  • Follow-up to answer any additional questions you may have.

Do You Qualify?

FHA will consider you for eligibility if you had a financial hardship in the past but can now document the following circumstances about yourself:

  • You meet FHA loan requirements
  • You can document the mortgage or credit problems resulted from a financial hardship
  • You have re-established a responsible credit history
  • You have completed HUD-approved housing counseling

A lender will first have to determine if you meet the FHA loan requirements before you can apply for a FHA loan under the Back to Work program. You will need to explain how the financial hardship was something beyond your control that reduced your income or caused you to lose employment. If your household income dropped by 20% or more for at least six months, it may count for this type of financial hardship.

To re-establish credit you must have a 12 month record of on-time rental housing payments with no delinquencies, and not have been 30 days late on more than one non-housing loan payment. If you still have any open collection or judgment accounts, then a “capacity analysis” will be done to see if you can repay those creditors.

FHA Back to Work Program Frequently Asked Questions

The FHA Back To Work – Extenuating Circumstances program is the FHA’s “second chance” for mortgage applicants who have experienced financial hardship as a result of unemployment or severe reduction in income.
Yes, you can use the program as a first-time buyer.
Yes, you can use the program as a repeat home buyer.
Yes, you can use the program for an FHA 203k construction loan.
Yes, the program waives the agency’s three-year waiting period. You no longer need to wait three years to apply for an FHA loan after experiencing a foreclosure, short sale or deed-in-lieu.
Yes, the program waives the agency’s two-year waiting period. You no longer need to wait two years to apply for an FHA loan after experiencing a Chapter 7 or Chapter 13 bankruptcy.
The program can be used by anyone who’s experienced a pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification; or who has entered into a forbearance agreement.
You can apply for an FHA Back to Work – Extenuating Circumstances mortgage with any FHA-approved lender. The mortgage approval process is the same for any other FHA-insured mortgage.
Mortgage rates are the same as mortgage rates for any other FHA loan. There is no premium on your interest rate, nor are there additional fees to pay at closing. Your mortgage rate will be unaffected by the FHA Back To Work program.
If your current lender is not participating in the FHA Back To Work program, you can find another lender. If you don’t know of another FHA-approved lender, you can get more information at www.hud.gov.
In order to qualify, you must meet several minimum eligibility standards. The first is that you must have experienced an “economic event” (e.g.; pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification, forbearance agreement). The second is that you must demonstrate a full recovery from the event. And, third, you must agree to complete housing counseling prior to closing. You must also show that your household income declined by 20% or more for a period of at least 6 months, which coincided with the above “economic event”.
In order to document a 20% loss of household income, you must present federal tax returns or W-2s, or a written Verification of Employment evidencing prior income. For loss of income based on seasonal or part-time employment, two years of seasonal or part-time employment in the same field must be verified and documented as well. Income after the onset of the economic event, which should represent a loss of at least 20% for at least six months, should be verified according to standard FHA guidelines. This may include W-2s, pay stubs, unemployment income receipts, or other. Your lender will help you determine the best method of verification.
Your lender will review your credit report as part of the FHA Back To Work approval process. All accounts will be reviewed — ones which went delinquent and ones which remained current. Your lender will attempt to determine three things — that you showed good credit history prior to the economic event; that your derogatory credit occurred after the onset of the economic event; and, that you have re-established a 12-month history of perfect payment history on major accounts. Minor delinquencies are allowed on revolving accounts.
The “20 percent loss of income” eligibility condition applies to everyone in the household. If one member of the household lost income as the result of a job less but the household income did not fall by 20 percent or more for a period of at least months, the borrower will not be FHA Ba Extenuating Circumstances-eligible.
No, the program is not limited by loan size. The FHA will always insure up to your area’s local FHA loan limit. Your lender, however, may not. If your lender will not make a loan big enough for your needs, find another FHA-approved lender. There are many of them.
Via the program, you can buy a home 12 months after a foreclosure.
Via the program, you can buy a home 12 months after a short sale.
Via the program, you can buy a home 12 months after a deed-in-lieu of foreclosure.
Via the program, you can buy a home 12 months after filing for Chapter 13 bankruptcy.
Via the program, you can buy a home 12 months after filing for Chapter 13 bankruptcy.
Yes, in order to the use the program, you must agree to attend housing counseling.
No, your housing counselor will not help you shop for mortgage rates. However, many counselors can help you read a Good Faith Estimate which may help you make better lending decisions.
The housing counseling required by the FHA Back To Work program will address the cause of your economic event, and help you consider actions which may prevent reoccurance.
The housing counseling required will typically last one hour.
No, you do not have to take the housing counseling in-person. Housing counseling may also be conducted by phone or via the internet.
No, you are not automatically approved for the FHA loan if you complete the housing counseling required. You must still qualify for the FHA mortgage based on Federal Housing Administration mortgage guidelines.
There is no minimum credit score requirement for the FHA Back To Work program, necessarily. The program follows standard FHA mortgage guidelines. Credit scores below 500 are not allowed, but borrowers with no credit score whatsoever remain eligible. The Federal Housing Administration doesn’t change mortgage rates based on credit score.
Yes, modified mortgages are eligible.
Yes, loans on a payment plan are eligible.
Yes, job loss resulting from an employer going out of business is Back-to-Work eligible. Your lender will ask you to provide a written termination notice or publicly-available documentation of the business closure.
Yes, you can use Unemployment Income receipt to document that you were out of work.
Yes, you can use the FHA Back To Work program if you are unemployed.
Yes, if your Chapter 13 bankruptcy has not been discharged prior to the date of your loan application, you must have written permission from Bankruptcy Court to enter into the purchase transaction.
The FHA Back To Work – Extenuating Circumstances program ends September 30, 2016.

Certifications & Experience

CHES, Inc. Advisers are NeighborWorks Certified in Foreclosure Prevention, Financial & Credit Management, Education & Counseling, HUD Approved Homebuyer & Homeownership Education (including Pre & Post Purchase). Additionally, each Adviser has a background in real estate,  responsible lending, and business & financial management.

Commitment to Excellence

CHES, Inc. is HUD Certified, and an adopter of The National Industry Standards for Homeownership Education & Counseling and The National Loan Modification Scam Alert Campaign. Each CHES, Inc. Adviser is committed to the National Industry Code of Ethics and Conduct for Homeownership Professionals. We are committed to providing excellence and measurable results to those we serve.

Call CHES, Inc. Today to Begin Improving Your Finances.

Financial Freedom…It’s Your Move!

1.816.533.7417