What are the FHA Back to Work Counseling Requirements?

The housing collapse caused many homeowners to short-sell their homes while others faced devastating foreclosures. If this unfortunate situation affected you and your family you may be interested to learn about the FHA Back to Work program.

The government recognized the impact the collapse had on millions of Americans. The Federal Housing Administration (FHA) created the FHA Back to Work program in an effort to help borrowers purchase a new home. This loan allows borrowers to obtain a new home loan in as little as 12 months. The borrower requirements include:

  • The borrower is able to prove their credit was damaged due to temporary loss of employment or reduction of income.
  • Show they have substantially recovered.
  • Prove their credit was damaged due to temporary loss of employment or reduction of income and show they have substantially recovered.

One of the requirements of this program is completion of counseling. Many prospective borrowers wonder what the counseling entails. Details include:

  • Borrowers can receive homeownership counseling or a combination of homeownership education and homeownership counseling.
  • A minimum of one hour of one-on-one counseling is required.
  • Counseling must be completed a minimum of thirty days prior to submitting a loan application.
  • Counseling expires in 6 months so if you have not submitted your loan application within 6 months of completing counseling you will have to repeat the counseling program.
  • Counseling involves a certified counselor assessing your debt, evaluating your ability to afford a mortgage, discussing features of a mortgage, explaining the loan application process and educating you about mortgage insurance.
  • A HUD-approved housing counseling agency must provide the counseling.
  • Homeownership education may be provided by HUD-approved housing counseling agencies, state housing finance agencies or through an online course.
  • Education can be done in person, via telephone or via Internet.

If you lost your home due to short sale or foreclosure and are ready for a fresh start the FHA Back to Work program may be right for you. The counseling requirement is a small step in the process and is intended to make sure you don’t face another foreclosure or short sale. Your dream of owning a home can become a reality. 1st Alliance Lending is an FHA Back to Work specialist. Contact us so we can help you determine if the FHA Back to Work program is right for your situation. We look forward to helping you on your path to a new home.

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