Dean Graziosi reports that the FHA recently announced an important change in mortgage rules that may allow some homeowners who have undergone a foreclosure to apply for a new FHA loan after just one year. This new rule also applies to homeowners who have experienced a short sale, deed-in-lieu or filed for bankruptcy. Dean Graziosi also shares that in order for borrowers to be eligible to participate in the program they have to show that they experienced a dramatic economic event such as losing their job or that their income has been drastically reduced. Potential borrowers will also need to prove that their income has rebounded since their foreclosure and their credit score must be at an acceptable point in order to be considered for the program.
In order for borrowers to be deemed a good credit risk, they must meet the following criteria, states Mr. Graziosi, and over the course of 12 months borrows must:
- Have no history of late rent payments.
- Have no more than one 30-day late payment to any creditors.
- And they must not be under any collections from creditors.
Mr. Graziosi also shares that before any borrower experienced any economic hardship, their credit must have been in good to satisfactory standing. This will help demonstrate to the FHA that the primary cause of the economic problems experienced by the borrower were the result of a dramatic change of financial standing.
Although the new rules released by the FHA provide borrowers with some hope of purchasing a home again sooner than they imagined, Mr. Graziosi would like to remind borrowers that the ultimate decision is at the discretion of the lenders. This is true even if the FHA rules state that they can lend to these individuals, the final decision is based on whether or not the lender believes the individuals are good credit risks. Depending on the lender, their lending policy may have become even tighter because of these restrictions.
Because of this, Mr. Graziosi recommends that buyers not lose hope if they are denied by one creditor. They may speak to another lender later that same day who will approve them, when going through this process, it is important that buyers never lose hope. This is also another reason why it is important to shop different lenders. Policies differ greatly from lender to lender and what may not be acceptable to one can be doable with another. As long as a potential borrower is in compliance with the criteria listed above, they may be able to find a lender without any problems. The important thing to remember is that the FHA has given borrowers another option to make purchasing a home easier.