The FHA’s program established to help consumers that suffered a negative financial occurrence in their life as a result of losing their job or suffering a serious illness that made them unable to work has proven to be a great way to get people back into a home sooner than the 2 or 3-year waiting period originally established.
HUD 45155.1 Chapter Four Section C may sound like it has the "final word" on FHA loan eligibility in cases of a short sale, but it’s not a good idea to assume you cannot get an FHA mortgage-the new Back To Work standards may be of some help for qualified borrowers.
The FHA Back to Work program allows qualified buyers who have experienced a severe economic event the ability to get into a home or back into a home, as the case may be. Some of the qualifying economic events are foreclosures, short sales, deeds-in-lieu, bankruptcy and forbearance agreements.
The Back to Work Program gives homebuyers a second chance at homeownership. To qualify for the program, mortgage borrowers must meet the standard FHA loan requirements, document prior financial hardship, re-establish an on time credit history, and complete a hud approved homeowner counseling program.