TBD FHA Back To Work Extenuating Circumstances Versus NON-QM Loans

This BLOG On TBD FHA Back To Work Extenuating Circumstances Versus NON-QM Loans Was UPDATED On April 7th, 2019

The FHA Back To Work Extenuating Circumstances Mortgage Program is no longer offered by any mortgage lenders.

FHA has discontinued this loan program
It was available for a limited time period but this loan program ended up to be a flop and not too many lenders were successful with the FHA Back To Work Extenuating Circumstances Mortgage Program
This Blog is an older blog that has been updated on April 2nd, 2019
The original content of this article will remain for archival purposes

However, Gustan Cho Associates now offers NON-QM Loans where there is no waiting period after a housing event and a one year waiting period after a Chapter 7 Bankruptcy discharged date.

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TBD Underwrite Offered By Gustan Cho Associates

Under most circumstances, a home buyer will need to get pre-approved by a mortgage lender and get a signed real estate purchase contract signed by the seller in order for the mortgage underwriting to start and eventually get conditional approval.

However, all mortgage loan pre-approvals at Gustan Cho Associates are full credit loan approvals signed off by our underwriters
Our pre-approvals are different than most lenders because the mortgage underwriter will underwrite the borrower as a TBD Underwrite without the property
Once the borrower is pre-approved, the only condition missing will be the property and updated borrower information like updated bank statements and paycheck stubs
This way, borrowers knows that they a fully credit approved and their mortgage loan will close on time

How TBD FHA Back To Work Extenuating Circumstances Were Underwritten

Majority of FHA Back To Work Extenuating Circumstances borrowers were denied for this loan program. Due to the high rate or mortgage denials, many lenders implemented TBD FHA Back To Work Extenuating Circumstances.

TBD Underwrites is when a mortgage underwriter fully underwrites a borrower’s application without the property:

However, with the all new HUD’s FHA Extenuating Circumstances due to an economic event mortgage program To Be Determined subject property were underwritten by most lenders
Borrowers files needed to start processing and underwriting the mortgage file prior to a pre-approval was issued.
Since the FHA Back to Work Extenuating Circumstances due to an economic event is an all-new program and the subject underwriter has a lot of discretion TBD subject property underwriting was required due to the high rate of denials
Getting a full loan approval prior to the borrower committing to a real estate purchase contract will be less stressful for all parties involved
So instead of having a pre-approval on hand, borrowers will be armed with a full mortgage loan approval subject to the subject property appraising out.

Unfortunately, even with TBD FHA Back To Work Extenuating Circumstances Mortgage Underwriting Program, the Back To Work Mortgage Program turned out to be a total flop and the program got discontinued.

The Demise Of TBD FHA Back to Work Extenuating Circumstances Qualification Requirements

HUD’s announcement this past August on FHA Back to Work Extenuating Circumstances due to an economic event greatly shortens the waiting period for those who have had a prior bankruptcy and/or foreclosure to a one year waiting period versus the traditional 2 year waiting period for bankruptcy and 3 year mandatory waiting period for deed in lieu of foreclosure, foreclosure, or short sale
However, there are strict mandatory guidelines and the program ended

Unemployment And FHA Back To Work Mortgage

FHA Back to Work Extenuating Circumstances due to an economic event requires that the borrower was either unemployed for the prior six months or more prior to filing for bankruptcy or initiating a foreclosure proceeding
If the borrower was employed and still filed bankruptcy or had a foreclosure proceeding initiated, then to qualify for the program, the borrower needs to show that he or she had a decrease of a 20% in total household income due to underemployment or other income economic event
Documentation is required and will be verified

Again, many lenders were confused with this guideline so they discontinued the TBD FHA Back To Work Extenuating Circumstances.

Re-Established Credit And Employment

The borrower needs to show that they are back to work with a full-time job and will be able to sustain the job for the next three years.

The borrower needs to show that they have re-established their credit and have no late payment history in the past 12 months
The borrower needs to show rental verification by providing 12 months worth of canceled checks that have been paid to their landlord
Cash payments do not count as proof as rental verification unless the home they are renting is being rented by a professional property management company
A letter from the property management company representative is sufficient

New Loan Program To Replace TBD FHA Back To Work Extenuating Circumstances

Gustan Cho Associates now offers NON-QM Loans and Bank Statement Loans For Self Employed Borrowers. With our new NON-QM Mortgage Program, there is no waiting period after a housing event.

No Waiting Period To Qualify For Home Loan After Foreclosure, Deed In Lieu Of Foreclosure, Short-Sale
One year waiting period after Chapter 7 Bankruptcy
Down Payment required is 10% to 20%
The down payment requirement depends on the borrower’s credit scores

Home Buyers who had a bankruptcy, deed in lieu of foreclosure, foreclosure, or short sale in the past and need to qualify for our NON-QM Loan Program, contact us at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com.

Gustan Cho NMLS ID # 873293