A reader asks, “Hello, my credit score is 540, I’m a single parent, husband left me with a foreclosed house and a debt of about $135,000+ just from the house no credit cards. I have been separated for 3 years. I want to purchase a home again. Are there any programs for a person like me in this situation?”
Borrowers who need assistance with issues like these should first call the FHA at 1-800 CALL FHA to request a referral to a HUD-approved housing counselor who may be able to assist with advice and pre-purchase counseling.
There are no specific FHA programs that are offered to borrowers in a specific category (bad credit, foreclosure, bankruptcy, etc) but the FHA and HUD have recently announced a new pilot program aimed at borrowers who are “underserved”.
According to HUDNo.14-048, “Under the new pilot, homebuyers will qualify for savings on their FHA-insured loans by completing HUD-approved housing counseling provided through independent nonprofit organizations that give people the tools they need to understand the rights and responsibilities of homeownership.”
“This counseling is aimed at improving buyers’ budgeting skills and housing decisions. In addition the Blueprint for Access includes enhancing FHA’s quality assurance efforts. Today HUD announced more information on FHA’s Quality Assurance Initiative, intended to provide greater clarity and transparency to FHA approved lenders to encourage lending to qualified borrowers across the credit spectrum.”
The program is called HAWK, “Homeowners Armed with Knowledge”. Some of the details of HAWK, according to the FHA, include major savings on the FHA loan with successful completion of the housing counseling program and on-time mortgage payments for a minimum amount of time.
“Under the four-year HAWK for New Homebuyers pilot program notice, homebuyers who commit to housing counseling will qualify for tangible savings on their FHA-insured loans. The average buyer would save approximately $325 a year – or almost $9,800 over the life of their loan. FHA proposes that homeowners who complete housing counseling before signing a contract to purchase a home and who complete additional pre-closing housing counseling will receive a 50 basis point reduction in the upfront FHA mortgage insurance premium (MIP) and a 10 basis point reduction in the annual FHA MIP.”
Contact the FHA directly for more information on the HAWK program, or discuss it with your loan officer.
Do you have questions about FHA home loans? Ask us in the comments section. You can apply or get pre-approved for an FHA loan at www.FHA.com, a private company and not a government website.