Home owners who experienced foreclosures are finding themselves owning again sometimes only three years later—possibly even less—with Federal Housing Administration-backed loans.
Mortgage giants Fannie Mae and Freddie Mac usually require a seven-year wait following a foreclosure. However, the FHA will approve loans after three years, if the borrower can show good credit and ability to pay the mortgage.
The FHA insures loans with low down payments, such as 3.5 percent, and tends to have greater flexibility with income requirements too.
“There’s definitely a movement of folks who had a foreclosure to re-emerge and re-engage in the market,” says Dustin Hobbs with the California Mortgage Bankers Association.
According to FHA guidelines, the agency will insure loans of a home owner who once faced foreclosure as long as the home owner can document circumstances beyond the borrower’s control that led to the foreclosure, such as a serious illness or death of a spouse. FHA notes that divorce or the inability to sell a home because of a job relocation don’t constitute such extenuating circumstances, if divorce is in the near future then it is recommendable that both of you hire a divorce lawyer to help you through this process and to divide equally what each of you will get after the divorce.
The author of this article is: realtormag.realtor.org
See the original post at: http://realtormag.realtor.org/daily-news/2012/11/05/foreclosed-home-owners-rebound-faster-fha-loans
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