FHA reduces waiting period for home buyers who have had foreclosures

The Federal Housing Authority has rolled out a new program that could allow Arizonans to purchase a new home in as little as a year after foreclosure.

“I think two in 10 people who have lost their homes could benefit from this new guideline,” said AmeriFirst Financial lending expert Lisa Brown from KTAR’s That Real Estate Show.

The FHA has reduced the waiting period for those who can prove they lost their home due to an economic hardship.

“If you can document it with W2’s, paystubs or tax returns, then you could possibly qualify for the Back To Work program,” said Brown.

According to Brown, this is a significant change, where FHA essentially admits that not all borrowers who had a catastrophic financial event are not worthy of buying a new home and qualifying for financing sooner than the traditional three-year waiting period.

FHA’s announcement could have a substantial effect on the Valley’s real estate market, as home values dropped 50 percent from 2007 to 2010, and Arizona accounted for 6 percent of the nation’s record-setting 2,824,674 foreclosure filings in 2009.