Real Estate World Wide
Shay Lowe

Homebuyers-FHA has waived its 3-year foreclosure and 2-Year BK waiting period

FHA has realized that, sometimes, credit events may be beyond your control, and that credit histories don’t always reflect a person’s true ability or willingness to pay on a mortgage.

The “Back to Work” Program is available as of August 15th from the Federal Housing Administration, better known as FHA relaxed its guidelines for homebuyers who “experienced periods of financial difficulty due to extenuating circumstances” and would like to purchase a home again.

The “Back to Work – Extenuating Circumstances Program”, has removed the traditional waiting periods that typically followed a derogatory credit event such as a Chapter 7 bankruptcy or if you had a short sale and had late mortgage and/or installment debt in the 12 months preceding the closing of the short sale.

If you’ve experienced any of the following financial difficulties over the last few years, you may be eligible for a new FHA insured mortgage to become a homeowner once again:

  • Pre-foreclosure sales
  • Short sales
  • Deed-in-lieu
  • Foreclosure
  • Chapter 7 bankruptcy
  • Chapter 13 bankruptcy
  • Loan modification
  • Forbearance agreements

FHA has realized that, sometimes, credit events may be beyond your control, and that credit histories don’t always reflect a person’s true ability or willingness to pay on a mortgage.

If you are a Homebuyer who has experienced an Economic Event (Short Sale, Bankruptcy, Deed in Lieu of Foreclosure or Foreclosure) in the past and can document that

(1) certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control,

(2) the homebuyer has demonstrated full Recovery from the event and,

(3) the homebuyer has completed housing counseling.

Recovery is considered full, if “the borrower’s credit history is clear of late housing or installment debt payments, and major derogatory credit issues on revolving accounts; any open mortgage is current and shows twelve (12) months satisfactory payment history. Mortgages may have been brought current through loan modification, which may be “temporary” or “permanent” so long as all payments have been documented as being received in accordance with the modification agreement.”

If the homebuyer meets the test for the Recovery, they must meet the another new test to see if the Loss of Employment or Loss of Income was severe enough to justify the Economic Event. The test put in place requires the documentation of a Borrower Household Income loss of twenty percent or more for a period of at least six months.

These transactions will require additional documentation for underwriting and loan approval, so homebuyers need to be prepared to provide the extra documentation and should allow a longer time period to obtain loan approval.

  • Lenders need to verify and document a reduction in the borrower’s Household Income of twenty (20) percent or more for a period of at least six (6) months that resulted from the Loss of Employment, Loss of Income, or a combination of both. This will be done using a combination of tax returns, W2’s, Verification of Employment forms, documentation of business closures, documentation of receipt of unemployment income or similarly reliable documentation. If the Loss of Income was seasonal in nature, a full two years prior to the prior to the loss of income must be documented.
  • Lenders will need to show evidence of on time payment history for housing, all remaining mortgages and installment debt for the last 12 months. Also in the event you had a previous short sale, provide documentation the proceeds served as payment in full.
  • Also they will need to document evidence for the bankruptcy

(a) the bankruptcy was discharged 12 or more months ago,

(b) the date of closing on a short sale was 12 or more months ago and finally

(c) that 12 months have lapsed since the date of title transfer to the foreclosing lender in the event of a foreclosure

  • The homebuyer will need a HUD Counseling Agency certificate of participation in pre-purchase counseling, which is a minimum, one hour of one-on-one counseling from HUD-approved housing counseling agencies be completed a minimum of thirty (30) days but no more than six (6) months prior to submitting a loan application to a lender. Also disclosing and relationship with the lender and counseling agency.

If you have buyer considering buying a new home here are the definitions that are considered during the loan approval process.

  • An Economic Event is any occurrence beyond the borrower’s control that results in Loss of Employment, Loss of Income, or a combination of both, which causes a reduction in the borrower’s Household Income of twenty (20) percent or more for a period of at least six (6) months.
  • The Onset of an Economic Event is the month of Loss of Employment/Income.
  • Recovery from an Economic Event is the re-establishment of Satisfactory Credit for a minimum of twelve (12) months.
  • The term Borrower includes borrowers and co-borrower.
  • Borrower Household Income means the gross income of the borrower and all Household Members for purposes of assessing loss of income (not qualifying income on the new loan). The gross income of each Household Member must be computed in accordance with current FHA income requirements.
  • Household Member means an individual residing at the borrower’s primary residence at the time of the Economic Event and who was a co-borrower on the borrower’s previous mortgage.
  • Housing Counseling means counseling from a HUD-approved housing counseling agency.

Tips for Sellers

Step 1: Get our Sold Homes Report  for your property:

Step 2: Home improvements to increase value

There are two reasons for pursuing home improvement projects:

Just Want To Do It — You want some new features in a home to improve your family’s quality of life, but you don’t want to leave your current home.

Really Need To Do It — You want to make your home more marketable to maximize return (or minimize loss) and speed up the sale process.

In the right market conditions, a project might fit into both categories. Other times, though, the two approaches will conflict:
Just Want To Do It — In situation A, the project is perceived as a necessary or worthwhile improvement to your family’s lifestyle. Say you have two or three teenagers in the family and the morning bathroom situation is completely out of control. It doesn’t matter if an additional bath generates a 150 percent return on investment or actually decreases the value of the home (unlikely). The economic impact just doesn’t matter. If you have the money for a new bath and you don’t want to move — you add the bath. It’s that simple.

Or say you’re a barbecue fiend and the only feature missing from the dream home you’ve just purchased is a sprawling backyard patio with a natural-gas grill custom-built with flagstone and river rock. Again, return on investment just isn’t going to be a critical question. The improvement becomes more comparable to purchasing a depreciating asset that you feel is a necessity for your lifestyle —such as an automobile. When the barbecue aficionado adds a deluxe patio to a home that’s already the most expensive property in the neighborhood — perhaps destroying the entire backyard in the process — there’s a good chance that very little of the cost will be recouped in a subsequent sale.

An even better example might be a pool. If you’re a person who simply has to have one — fine. Put in a pool. But it’s probably worth checking with a REALTOR® first, just to make sure you fully understand that adding the pool might actually lessen the property’s value and make it more difficult to sell should you later decide to move. That’s the reality in many markets. That doesn’t necessarily mean you shouldn’t do it, especially if you’re planning to live in the home for the rest of your life. It just means it’s worth knowing the cost and saleability impacts at the front end — even if they’re not going to deter you from pursuing the project.

Really Need To Do It — The “type-B” home improvement project is pursued primarily to increase the property’s saleability. In turn, this often increases your return on investment. A REALTOR® can advise you of possible improvements that will attract more potential buyers and also pay for themselves either through increasing the home’s value or through shortening the time it takes to sell the home.

Here we’re typically talking about projects such as: painting — either because the existing paint is in bad shape or is an unusual color; replacing carpets —again because of age, color or style; repairing or resurfacing a cracked driveway or sidewalk; refacing kitchen cabinets; and trimming or removing overgrown or unattractive landscaping.

While spending several thousand dollars on your home right before you sell it might not sound very appealing, it’s not uncommon for the right work to more than pay for itself in a higher selling price and shorter marketing time.

Consult with an experienced REALTOR® to learn what improvements will make your home more marketable in comparison to similar properties that are now —or recently have been — on the market in your area.


1. Internet Advertising- Yahoo!,, …

Did You Know Most Buyers and Sellers Start On The Internet First.

2. Local Multiple Listing Service (MLS), Visual Tours, Open Houses …

3. Local, National, International Marketing.


Tips For Buyers

Tips For Buyers

No one wants to contract a case of buyer’s remorse. You know what we are talking about. It is that feeling that you’ve either paid too much or received too little. In most cases, there is no recourse for the buyer to receive recompense once the contract has been signed.

If no one wants to catch a case of buyer’s remorse, why are there so many people out there who suffer from it? The answer is simple, most of these people engaged in a transaction without enough knowledge and information.

The best way to make sure that you choose the right home is to properly prepare yourself. The purchase of a home is a tremendous investment, both monetarily and emotionally. The purpose of this page is to in provide you with some tips that will help your transaction progress smoothly and result in you being a happy homeowner.

Remember, if you have any questions we are always just a phone call.

  • Get help. Your home is likely to represent one of the largest investments in your life. In order to make sure that the transaction goes smoothly it is of vital importance that you choose the right REALTOR® to represent your interests. The right REALTOR® will be someone whose experience and personality makes you feel comfortable. You should try to find an REALTOR® that is familiar and knowledgeable about the area you plan to move into.
  • Get pre-approved. Do you already know how much home you can afford? There is nothing more frustrating than looking for a home, finding the perfect home, and then discovering that it is out of your price range. Speak with a lender to learn about the different financing options available to you. When you find the right lender get the paperwork processed so that you will be ready to buy when you find the right home.
  • Avoid major purchases. In order to determine the amount of home you can afford a lender uses your debt-to-income ratio. This ratio is the percentage of your pre-tax income that you spend on debt. Your debt ratio will include: monthly housing costs, car payments, credit cards, student loans, and any other installment debt. If you take on more debt right before buying a home it is going to have an impact on the amount of the loan that the lender will finance.
  • In order to make an educated decision you need to know what is available and how much it is going for. You can browse all the active listings from my website. Once you have found some homes you like save those searches and sign up for property watch so that new listings will be emailed to you. The best homes move fast so you need to make sure that you are on top of the available inventory at all times so you do not miss out. Sign up for Home Buyer Scouting.

  • Your REALTOR® will Ask Questions. No one knows the home better than the seller of the property; however it is not always in the seller’s best interest to disclose all the information. If you find out the seller’s motivation for selling you might be able to negotiate a better deal on the home. Try to find out the last time service was performed on the roof, furnace, and water heating. Asking the right questions now can end up saving you a lot of money in the long run.
  • Get inspected. The last thing you want to discover after you have bought a home is that you have purchased a “money pit”. By “money pit” I am referring to a home that is full of defects that are going to end up costing you a lot of money. Save yourself a lot of time in future litigation and renovation by bringing in a licensed home inspector before you buy. If any problems are found it will steer you away from a bad decision or help you negotiate a better price.