The FHA’s program established to help consumers that suffered a negative financial occurrence in their life as a result of losing their job or suffering a serious illness that made them unable to work has proven to be a great way to get people back into a home sooner than the 2 or 3-year waiting period originally established. This program that continues through September of this year, has one particular requirement, however. You must obtain housing counseling. This is not a requirement of standard FHA loans, but those that have a foreclosure or bankruptcy in their past and want to apply for the waiver to skip the long waiting periods will need it.
What is Housing Counseling?
Housing counseling is a class which you take with an approved agency to learn about home ownership, its responsibilities, and how to avoid another negative economic event. In order to satisfy the requirements of the FHA program, you must receive one hour minimum counseling on a one-to-one basis from an approved agency. During this session you should be prepared to discuss the negative financial occurrence that took place in your life, such as a foreclosure or bankruptcy, what led up to it, and how you can prevent it from occurring in the future. The session might be a little uncomfortable for you as you have to relive your past mistakes, but it will help prepare you for a successful future.
Who is Approved to Conduct the Counseling?
You have several options when you participate in the counseling program. The agency must be HUD approved and can be a housing agency through the federal or state government. There are also certain approved third parties which your lender can point you towards if that is the direction you wish to take. Your last option is to take the course online from the comfort of your own home. This allows you to complete the course when it is most convenient for you and any co-borrowers.
The housing counseling must be done before you apply for the FHA Back-to-Work Program. The general timeframe is anywhere between 30 days and 6 months before you apply for the loan. If you take the course longer than 6 months before you apply for the loan, you will have to retake it as the FHA requires it to be no longer than 6 months since the class.
Upon completion of the program, you should receive documentation of your participation in the course on the agency’s letterhead. The document needs to contain your name, the date, and the name of the counselor that conducted your session. This documentation is then used as a part of your file to qualify for the FHA Back-to-Work Program.