The Partnership’s Consumer Credit Counseling Services will offer a required eight-hour pre-purchase class running Sept. 12 through Oct. 3, from 6 to 8 p.m. Partnership’s CCCS program wants to make consumers aware of these changes, as a greater understanding of the FHA loan process increases the likelihood of the consumer being able to get approved for an FHA loan.
The new set of guidelines includes the following:
n Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHA loan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.
n For borrowers who went through a recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”
n In order to be eligible for the more lenient approval process, provided documents must show “certain credit impairments” were from loss of employment or loss of income that was beyond their control. The lender also needs to verify the income loss was at least 20 percent for a period lasting for at least six months.
n According to the letter, recovery from an economic event involves re-establishing “satisfactory credit” for at least 12 months. Criteria for satisfactory credit include 12 months of good payment history on payments such as a mortgage, rent, or credit account.
n Borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.
n The new guidance is for case numbers assigned on or after Aug. 15, 2013, and is effective through Sept. 30, 2016.
For help or to learn more, contact a trained and certified counselor at Partnership’s Consumer Credit Counseling Service by calling 490-5620 or 1-800-459-2227 or visiting www.CreditHelpToday.org.