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Prospect Financial Group, Inc.

How to get an FHA Loan After a Foreclosure

Thursday, October 3, 2013 - Article by: Prospect Financial Group, Inc. - Message

The Federal Housing Administration (FHA) recently added economic events to a list of extenuating circumstances that can reduce the waiting period between the time they can qualify for an FHA loan and a foreclosure. Now, homeowners that lost their homes due to foreclosure during the recession can return to the housing marketing sooner with an FHA loan.

Typically, the waiting period that a consumer would have to endure after a foreclosure is 36 months. With the new rule, the waiting period can be reduced to as little as 12 months. This new rule will help homeowners who were forced into a foreclosure or short sale because they were laid off or had a reduction in pay due to the nation's economic position.

In order to qualify for this waiting period reduction, you must meet the following criteria:

  • Experienced a period of 6 months or more where the household income was reduced by 20% or more
  • The decrease in income was a result of pay cuts or unemployment beyond the borrower's control
  • The borrower must have re-established credit for at least a year
  • The borrower must have completed housing counseling

This new rule is in effect immediately and will be in effect until September 2016.

For more information about this program visit the Federal Housing Administration's website or call Prospect Financial Group, Inc. at 858-605-0952.

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