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FHA Back to Work Program Guidelines

Man holding a back to work signFHA has not renewed this program and is currently unavailable. Call your Congressman and Senator to reinstate the FHA Back to Work program.

The FHA Back to Work Program enables a home buyer to purchase a home just 12 months after a foreclosure, short sale or a deed in lieu of foreclosure. The FHA program was announced in 2013, and was extended through Sept. 30, 2016. The Back to Work Program gives homebuyers a second chance at homeownership. To qualify for the program, mortgage borrowers must meet the standard FHA loan requirements, document prior financial hardship, re-establish an on time credit history, and complete a HUD approved homeowner counseling program.

Limitations to the program may include previous loan modifications, adjustable-rate loan recasting, inability to rent a previous income property, and divorce


On August 15, 2013, the Federal Housing Administration (FHA) loosed its guidelines for borrowers who "experienced periods of financial difficulty due to extenuating circumstances".

The following financial difficulties may be program-eligible under the program:

  • Chapter 7 bankruptcy

  • Chapter 13 bankruptcy

  • Deed-in-lieu

  • Forbearance agreements

  • Foreclosure

  • Loan modification

  • Short sales

  • Pre-foreclosure sales

The program waives the agency's three-year waiting period after experiencing a foreclosure, short sale or deed-in-lieu and waives the FHA two-year waiting period after a Chapter 7 or Chapter 13 bankruptcy.

Homebuyer/applicants must meet several minimum eligibility standards. The first requirement is that you must have experienced an "economic event" (i.e. short sale, pre-foreclosure sale, deed-in-lieu, foreclosure, Chapter 13 bankruptcy, Chapter 7 bankruptcy, loan modification, forbearance agreement). You need to show a 20% loss of income or more for at least six consecutive months leading up to the event to be eligible for the program. Supporting documentation includes pay stubs with lower year-to-date earnings when your income dropped. Unemployment compensation receipts, W-2s and/or tax returns meet the FHA requirement. You must prove a complete recovery from the economic event and you have re-established your income

You must have had a good credit history prior to the economic event and that the bad credit occurred after the start of the economic event; and, that you have re-established a perfect payment record for 12-months on major accounts and other obligations. Limited late payments on revolving accounts may be permitted.

Rotating question markFrequently Asked Questions About The Back to Work Program

Q. Can first-time home buyers use the program?
A. Yes, first-time buyers are eligible.

Q. Can you be denied a FHA loan?
A. Loan denial can occur for any number of reasons, such as an excess debt ratio, inadequate employment, etc.

Q. Can you get a FHA loan twice?
A. Yes. A second FHA home loan is possible if the applicant meets the second home guidelines. But in most cases, the first FHA loan will need to be paid off.

Q. Can repeat home buyer use the program?
A. Yes

Q. Do sellers have to pay closing costs on FHA loans?
A. Home sellers are not required to pay the buyer's closing costs. However, if agreed to in the sales contract, the seller can pay up to 6% of the sales price.

Q. What is the minimum credit score for the FHA Back to Work program
A. There is no minimum credit score requirement for the FHA Back to Work program, although FHA lenders may establish a minimum credit score for approval.

FHA back to work program lenders