In August, the Federal Housing Administration (FHA) launched its Back to Work – Extenuating Circumstances program, which shortens the waiting period for home buyers who have gone through foreclosure or bankruptcy but want to buy a home again.
To qualify for the program, home buyers need to show documentation proving that they suffered an economic event that resulted in a loss of 20% or more of their income for a period of six months or more, and that they have fully recovered financially from this event. In addition, participants must have received counseling from a U.S. Department of Housing and Urban Development (HUD)-approved agency.
Providing a borrower qualifies, he or she can be approved for an FHA-backed mortgage again in as little as a year – as opposed to the two to seven years it would normally take, depending on the degree of damage to a borrower's credit.
To assist borrowers with the counseling piece, Springboard, a HUD-approved housing counseling agency, has launched Priority Pre-purchase Counseling, a new platform to better serve consumer demand for the Back to Work program.
The new online platform allows consumers to request priority counseling appointments with a certified housing counselor. It also supports electronic certificate delivery by way of secure email, at a consumer's request, and facilitates the creation of a customized action plan that provides a road map to managing finances.
"Housing counseling is an important resource for both first-time home buyers and those seeking to repurchase a home," says Melinda Opperman, senior vice president of Springboard, in a release. "Among the important elements of the home buying process, pre-purchase housing counseling enables consumers to better understand their personal credit obligations while also providing guidance in assessing and managing household finances and budgets. Further, the counseling helps the consumer gauge their ability to afford a mortgage, as well understand the loan application process and the various features of a mortgage, such as mortgage insurance requirements.’
Heather Shanahan, with Springboard's program development office, adds that the organization is anticipating strong participation in the Back to Work program.
"While we have already helped numerous clients, as more consumers learn about the new program, we are prepared for a considerable increase," she says.Â
Springboard is a 501(c)(3) nonprofit personal financial education and counseling organization founded in 1974. In addition to being a HUD-approved housing counseling agency, the organization is also a member of the National Foundation for Credit Counseling and the Association of Independent Credit Counseling Agencies.
Springboard offers its counseling services online, in person and via telephone. For more, click here.