Tag Archives: Idaho Housing

Changes to FHA loan program waives the 3 yr waiting period after a foreclosure or short sale!


Borrowers who lost their homes through foreclosure or short sale will no longer have to wait three years to get a mortgage to buy another home.

The Federal Housing Administration has changed the rules to help buyers whose credit was tainted due to the loss of a job or income reduction. They will now be able to get a mortgage to buy again after a one-year waiting period through the FHA’s new lending program, dubbed Back to Work. The FHA previously required these buyers to wait three years before applying for a mortgage.

Buyers who can document they lost their home to foreclosure or filed for bankruptcy because they were laid off or because their income was reduced by at least 20 percent will be eligible to apply for a loan after paying their bills on time for a year, according to the instructions the FHA sent lenders last week.

The change is effective immediately until September 2016.

Some of the qualifications:

Borrowers will be required to provide documentation showing the loss of income or employment, including termination notices, tax returns and W-2s.

The program is designed to help potential buyers who went through a period of financial distress but have been able to get back on their feet and can afford a home again.

The program is especially helpful to borrowers who went through bankruptcy and foreclosure simultaneously. Often, the lender doesn’t take title of the property until years after the discharge of the bankruptcy, which has delayed the start of the waiting period for many potential buyers.

During the one-year waiting period after the foreclosure sale, bankruptcy discharge or short sale closing, the borrower should have:

  • No late housing payments (rent/mortgage).
  • No more than one 30-day late payment on all other      accounts.
  • No accounts in collection.

Borrowers will also be required to go through housing counseling prior to being approved for the loan-I expect Idaho Housing to offer this and be a leader in this program.

As you can see, it’s not simply a wipe the slate clean and start over program, it will take some preparation to get requalified.

If you need a lender who will do the hard work, call me.

New Options for Idaho Home Buyers, zero down with NO MORTGAGE INSURANCE!

Our friends at Idaho Housing and Finance Association just rolled out a new program that will give Idaho Home Buyers a better option for low down payment financing.

The Program is called the Preferred Risk Program.  It its a Fannie Mae program that will finance up to 97% of the purchase price of the home.  It doesn’t have mortgage insurance, instead the rate is slightly higher than the IHFA FHA loan program. 

The payment on a $100,000 loan would be $493 (p&I).  On a $100,000 FHA program the P&I payment would be $463 but it carried a mandatory mortgage insurance premium of $95.83. The savings would be$65.83 per month using the preferred risk program.

One other benefit the IHFA preferred risk program has it that it can be combined with IHFA’s second mortgage program, the Good Credit Rewards, to get the homeowner in the home with zero down payment.  It can also be combined with the IHFA Down Payment Closing Cost grant program for those who qualify, also creating a zero down payment financing package.

The program does require the borrowers to have a decent credit score, 660 and take their home buyer education course, Finally Home.      

We are direct underwriters for Idaho Housing and Finance Association’s programs.  I have great respect for the staff at IHFA and feel confident when placing a client with them that it will be a positive experience for my clients.

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