FHA Cuts Mortgage Wait Times After Hard Times

August 16, 2013
Chicago Tribune  
mortgage lending news

Borrowers now will be able to qualify for an FHA-backed mortgage one year after a bankruptcy, foreclosure, or short sale -- much sooner than the previous waiting periods of two years following bankruptcy and three years following foreclosure or short sale. However, the agency is requiring borrowers to show that their household income fell by 20 percent or more for at least six months and was tied to unemployment or another event beyond their control. They additionally must prove that they have had at least one hour of approved housing counseling and 12 months of on-time housing payments, among other criteria. "FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage," FHA Commissioner Carol Galante said about the relaxed restrictions.
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