The
Federal Housing Administration (FHA) is allowing borrowers who
went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter
the market in as little as 12 months, according to a mortgage letter released
Friday.
Borrowers
who experienced a foreclosure must wait at least three years before getting a
chance to get approved for an FHA loan, but with the new guideline, certain
borrowers who lost their home as a result of an economic hardship may be
considered even earlier.
For
borrowers who went through a recession-related financial event, FHA stated it
realizes “their credit histories may not fully reflect their true ability or
propensity to repay a mortgage.”
