Realtor Julie Jalone

Potential homeowners who had difficulties during the recession are being offered help by the Federal Housing Administration (FHA).

If you’ve experienced any of the following financial difficulties, you may be program-eligible:

  • Pre-foreclosure sales
  • Short sales
  • Deed-in-lieu
  • Foreclosure
  • Chapter 7 bankruptcy
  • Chapter 13 bankruptcy
  • Loan modification
  • Forbearance agreements

The FHA realizes that, sometimes, credit events may be beyond your control, and that credit histories don’t always reflect a person’s true ability or willingness to pay on a mortgage.

FHA insurance is now available to those who can prove they are no longer financially compromised and met all other FHA requirements. 

To be eligible for the FHA Back to Work – Extenuating Circumstances Program a borrower must show the “economic event” caused a minimum 20 percent loss of household income for at least 6-months and demonstrate a full recovery.  In addition the FHA is requiring lenders to verify at least a year has passed since the foreclosure and the economic event is responsible for the loss of the home or bankruptcy.

The FHA’s primary role is as an insurer of mortgage loans made by FHA-approved lenders. Since its inception, FHA has insured more than 34 million loans which makes them the world’s largest insurer of mortgages.

FHA mortgage insurance is available for any loan which meets the following two conditions:

  1. The loan must be made by an approved FHA lender
  2. The loan must meet the minimum standards of the “FHA Mortgage Guidelines”.

The minimum standards of the FHA mortgage guidelines are straight-forward. Some of the more well-known rules require mortgage applicants to show a minimum credit score of 500; to make a down payment of at least 3.5% on a purchase; and, to verify income via W-2 or federal tax returns.

The guidelines also include topics such as U.S. citizenship requirements; relocation rules; and, minimum standards for condominiums and co-ops.

For more information on the FHA Back to Work – Extenuating Circumstances Program call me at the MagnumOne Realty office in Roseville (916-899-6571), send me an email at or check out my Q & A on my website.