If you are one of the millions of people who lost their home due to the severe downturn in our economy the last few years, your next home could be just around the corner.
On August 15, the U.S. Dept. of Housing and Urban Development (HUD) released the “Back to Work – Extenuating Circumstances” guidelines, making homeownership possible again within 12 months for those who lost their home due to foreclosure, short sale or bankruptcy, or deed in lieu of foreclosure. Previously the wait time was 36 months.
Prior to these new guidelines “Extenuating Circumstances” were limited to death or permanent disability. This definition has now been expanded to include a loss in your household income of 20% or more, for a minimum of six months. This could have been a result of a lay off, termination or your employer going out of business. This “specific event” must be documented and supported with tax returns and W-2s.
In addition to this, you must also be able to prove that essentially you have put the past behind and have recovered from whatever “extenuating circumstance” or “specific economical event” that caused you to lose your home in the first place, and that it is unlikely to happen again.
This means verifiable, stable employment, pay stubs and a history of making payments on time. Payment history will include rental/mortgage payments, installment payments, and revolving payments for the previous 12 months.
You will also be required to complete HUD-approved housing counseling. Counseling may be conducted in person, via telephone or the internet. For a list of HUD approved counseling agencies in California call 800-569-4287.
You must also meet all other HUD requirements to qualify for an FHA insured mortgage.
For more details, please contact your lender, or feel free to call me if you have any questions.
Maggie Clemens served her customers with distinction for over 25 years in the local auto industry and for the last several years has been a licensed real estate agent with Keller Williams San Diego Metro. She can be reached at firstname.lastname@example.org or at maggieclemens.com.