Recently, the Federal Housing Administration (FHA) announced they will be cutting the “waiting time” for homeowners who went through foreclosure, bankruptcy, short sale, or deed-in-lieu to receive a new loan and to get back into the real estate market. With the new rule, the FHA has cut the waiting time from 3 years to 12 months, allowing borrowers the chance for a new loan approval. There are guidelines to this new rule, which include:
- Certain borrowers who lost their home as a result of economic hardship could be considered for a new loan earlier than 12 months.
- Borrowers who experienced a “recession-related” financial event can be considered under the new guidelines.
- To be eligible, you must provide documents that show “credit impairments” as a result from a loss in employment or income. The lender also needs to verify the income loss was at least 20% for a period lasting more than 6 months.
- In addition to all requirements, borrowers must show they have recovered from the event that caused their hardship and complete housing counseling.
On top of the new guideline requirements, showing your “recovery” from an economic event means you must reestablish satisfactory credit for at least 12 months. Criteria for good credit involves 12 months of good payment history on mortgage, rent, or a credit account. The new rule will be effective from August 15, 2013 to September 30, 2016. [Source & Credit: Esther Cho]
Buying Real Estate in Ann Arbor, MI
With these new FHA guidelines put in place, this allows for a number of homeowners to reenter the real estate market. If you qualify for a FHA loan, you can buy a new home within the 12 months deadline. So, if you’re looking for a new place, we suggest you start with real estate in Ann Arbor. Homes and condos are affordable. They feature modern amenities that place you in the heart of the city — close to the University of Michigan and to other work places. To view current available listings, click the button below: