As a New Jersey Short Sale specialist, one of the questions I am often asked by my clients is, “How long do I have to wait after a Short Sale before I can buy another home?” One of the benefits of chosing to Short Sale your NJ home is that the time to purchase again is less than it would be if your were foreclosed or filed bankruptcy. But that waiting time to buy a home after a Short Sale just got shorter.
The FHA Back to Work – Extenuating Circumstances Program offers consumers the opportunity to significantly reduce the waiting period to purchase another home. If you’ve completed any of the following in the last year, you may be eligible for this program:
- Pre-foreclosure sales
- Short sales
- Chapter 7 bankruptcy
- Chapter 13 bankruptcy
- Loan modification
- Forbearance agreements
Manuel “Manny” Foranoce of REMN answered a few questions about this important program.
Q. With the FHA Back To Work Program, how soon until I can buy a home after a short sale, foreclosure or deed-in-lieu of foreclosure?
A. Via the program, you can buy a home 12 months after a short sale, foreclosure or deed-in-lieu of foreclosure.
Q. What are mortgage rates for the FHA Back To Work program?
A. 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.
Q. What are the minimum eligibility requirements of the FHA Back To Work program?
A. In order to qualify, you must first have experienced an “economic event” (e.g.; pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, 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”.
Q. I lost my job because my employer went out of business? Does this qualify for the program?
A. 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.
Q. Can I use Unemployment Income receipts to document that I was out of work?
A. Yes, you can use Unemployment Income receipt to document that you were out of work.
For more information on NJ Short Sales, please contact me for a free, confidential consultation.