In North Carolina we decided this summer (our legislature decided) not to pay extended unemployment benefits. According to a documentary we watched on WRAL last night, in July of 2013 there were 65,000 that lost this Federal benefit – after losing their jobs months earlier. We wanted to highlight a program the Obama Administration opened up a few weeks ago that might help some of these folks, once they get back on their feet.
The FHA Back to Work Program is available for folks who go through a severe credit slump that is directly tied back to a job loss. In most cases, if you have a foreclosure, for instance, you must wait several years before you can buy another house. With the new FHA Back to Work Program, those who can show that the credit “issue” (foreclosure, short sale, severe delinquencies, bankruptcy) was a direct result of the job loss get a break.
If someone in the household (doesn’t have to be the borrower – it could be the spouse) lost a job for at least 6 months, and the income for that household of at least 20% during that time, only have to wait 12 months before they can buy a home. During the waiting period, payments need to be made on time, and you need to establish a pattern of good credit. The documentation that we need for this FHA Back to Work Mortgage program is pretty specific.
Many times, we see folks who had good credit, had a bump in the road that shook them – and then they go to an “all cash” family economic plan and don’t use credit anymore. This will not be the best strategy if you want to buy a home in the near future, because we must establish that you are now “past” the problem – and be able to see that you are making payments on time. We often suggest that folks in this situation take out Secured Credit Cards.
Credit Counseling Requirements For FHA Back To Work Program
There are specific First Time Home Buyer Programs that we offer that require pre-purchase Counseling from a HUD Approved Credit Counseling Agency. This is an 8 hour class. We talked to 11 of the Agencies in North Carolina that offer the Course. Some offer $50 or less – but most of these are free. There are FHA Back To Work and First Time Home Buyer sessions already scheduled in most parts of North Carolina for the Saturday morning of Sept 21 and Sept 28 from 9 until 1.
The Credit Counseling Agencies on the HUD Website need to confirm for you that the certificate you receive will specifically state the counseling was in accordance with the requirements of the FHA BACK TO WORK PROGRAM. The folks we talked to said if it needs to be done over the phone, they generally break it down into 4 sessions lasting 2 hours each. According to HUD, the counseling can be done in person, by phone or over the Internet – but we did not find any Counseling Agencies in NC doing the Counseling via the Internet (if you find one, PLEASE let us know, or leave information in the comment section below!)
To find an approved NC counselor http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=NC you can start calling folks on this list. Based upon our calls, unfortunately, most NC Housing Counselors were not even aware of this program yet.
To qualify for the FHA Back to Work Program, you must have the certificate from Counseling a minimum of 30 days prior to us taking your full loan application – and you writing a contract.
The shorter waiting period is a blessing for many people, we thing the FHA Back to Work Program is going to be great for the folks it’s suppose to help! If you are interested in getting more information about your particular situation – please call Steve and Eleanor Thorne 919 649 5058 . We want to help you buy your next home in North Carolina! Credit Scores can be fixed – here are some tips for fixing your credit scores NOW.