How New FHA Program Helps Buyers Recovering from Financial Hardship

The American Dream of home ownership has evolved into an economic nightmare for millions. A combination of recessionary economic climes and home value declines has left many holding an empty trick bag full of heartache, frustration, and financial devastation.

Recent regulatory changes by government mortgage guarantor Federal Housing Administration (“FHA”), however, holds out new hope to those who have sustained severe credit damage and serious financial hardship through no fault of their own.

Back to Work works to restore budgetary balance

FHA recently implemented a new program known as “Back to Work – Extenuating Circumstances” (“BTWEC”) to relax rigid mortgage reapplication criteria. Previous FHA regulatory provisions imposed a three-year wait to reapply for government-backed mortgages following adverse financial events. Recently revised guidelines enable prospective borrowers who experienced previous “… financial difficulty due to extenuating circumstances” to obtain new FHA home loans after just one year.

This recent change reflects long-overdue official recognition of the reality that bad things often happen to good people.

Eligibility criteria

Borrowers assigned FHA case numbers on or after August 15, 2013 for any of the following issues may be eligible:

• Short sale
• Pre-foreclosure sale
• Deed-in-lieu of foreclosure
• Foreclosure
• Bankruptcy
• Loan forbearance
• Loan modification

Besides the above threshold criteria, prospective FHA mortgage re-borrowers must also:

• Exhibit “full recovery” from prior financial adversities;

• Complete a one-hour housing counseling session; and,

• Demonstrate a household income decrease of at least 20-percent for six months or longer that coincided with the adverse “economic event.” Acceptable forms of qualification documentation

Re-applicants may provide tax returns, W-2s, pay stubs, unemployment compensation benefits receipts, and/or written verification of previous employment earnings to prove a minimum 20-percent drop in household income.

BTWEC loan approval requires no minimum credit score. Despite this, lenders must verify satisfactory post-event credit history by analyzing applicants’ credit files to identify:

• Satisfactory pre-event credit rating;
• Post-event-derogatory credit history; and,
• Flawless repayment history of at least one year

Application process

Prospective BTWEC borrowers may apply through any FHA-approved lender. Interest rates, closing costs, and loan limits are identical to those of other FHA mortgages.

Now vs. never

Qualified prospective BTWEC borrowers must act quickly. Present prevailing interest rates reflect extreme volatility and upward mobility. Moreover, as elsewhere, the current Las Vegas real estate market posture is currently buyer-favorable. As the old saying goes, however, “Nothing good lasts forever.” So, whatever you real estate needs, don’t hesitate to contact The Batchelor Group today. Tomorrow may be too late… The market and it’s buyer based programs are continually changing!


Jillian Batchelor, and The Batchelor Group, consistently rank in the top 250 Realtors in the Las Vegas Valley. With 11+ years in the Real Estate industry, with thousands of pleased home owners and home sellers over the years. Jillian is one of the strongest working Real Estate professionals out there.