Home Buying in Atlanta>Question Details

ATL1JCG, Home Buyer in Atlanta, GA

Buying Short Sale with FHA "Back to Work"

Asked by ATL1JCG, Atlanta, GA Wed Dec 18, 2013

We are currently in the process of getting pre-qualified via the FHA "Back to Work" program. The house that we want to put in an offer on is a short sale. Are we wasting our time buy trying to buy a short sale with this program? I understand that it typically takes 60 days to close using this program since HUD approval is needed for the final CAIVRS waiver. Would a bank seriously entertain our offer based on the delayed closing time?

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A lot will depend on how far along the Short Sale approval is. If the approval is already in place, then the lender will usually require closing in no longer than 30-45 days. That would probably not be sufficient time for the extra time that must be allowed for HUD to give a clear CAIVRS if you have previously defaulted on another government backed loan.

HUD also requires that you must also attend housing counseling from an approved HUD Housing Counseling Agency. This class must be taken at least 30 days PRIOR TO your loan application date, but no more than six months before that date.

FHA mortgages are the least restrictive for a previous foreclosure. The standard waiting period for a new FHA mortgage after previous foreclosure is a minimum of 36 months.

In August 2013, HUD implemented a new rule concerning a previous Foreclosure, Short Sale, or Bankruptcy.

If you could use a fresh start at homeownership, Prospect Mortgage's Second Chanceâ„¢ program might be for you. If you lost your home to foreclosure, short-sold your home, or filed bankruptcy because of reduced income lasting over six months, you could qualify to buy again!

Second Chanceâ„¢ program benefits:

- Previous bankruptcy, foreclosures and short sales okay
- Only a 12-month waiting period
- Low down payment of 3.5%
- No income restrictions
- Gift funds permitted

To qualify, you must have experienced an "economic event," which is any occurrence beyond your control that resulted in a loss of employment, loss of income or a combination of both. The event must have caused a reduction in household income by 20% or greater that lasted at least six months or longer.

To be eligible, HUD requires that you must have recovered from the "economic event" with the re-establishment of satisfactory credit for a minimum of 12 months.

If you do not meet the above requirements, then it would be a waiting period of a minimum of 3 years from the foreclosure date. Once you are ready to purchase, working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com to get started.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of mortgage lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203(k) Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
1 vote Thank Flag Link Thu Dec 19, 2013
RUN RUN RUN...Short Sales are a waste of time! The seller (owner) can call it off at any given moment. The banks are very slow & the file goes through some many different processors. It definitely takes longer that 60days. I recently was involved with one, 120 days, and the seller went crazy, and cancel the process. If possible find a approved short-sale, if you want to go that route.
0 votes Thank Flag Link Fri Dec 27, 2013
I think Rodney nail it. Great answer. That's it and all in the nut shell.

Monique Cunningham
0 votes Thank Flag Link Fri Dec 20, 2013

Typically short sales will take longer to close so the 60 day window should be long enough. With that said, it is crucial for you to get pre-approved for the Back To Work program as soon as possible to give you more negotiating leverage. We have had great success with this program so I would be happy to discuss the requirements with you at your convenience.

Timothy Brown | LPO Manager
EVOLVE bank & trust
11605 Haynes Bridge Road Suite 125 | Alpharetta, GA 30009
678.468.5626 x110 | fax 678.935.1156 | cell 678.467.9959
NMLS#: 168281
0 votes Thank Flag Link Wed Dec 18, 2013
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