Selling your San Clemente home or condo at some point in time is practically a given – no one stays in their home forever. However, the housing downturn from a few years ago saw thousands of San Clemente home owners lose their homes, not because they wanted to but because they had no choice. The economic crisis destroyed the credit and incomes of millions of Americans, and those who could no longer afford their monthly mortgage payments were forced to sell their homes via short sale or foreclosure. For many of these people, buying a home shortly after losing their previous one was not an option due to the massive hit their credit scores took with the added short sale or foreclosure. However, a program introduced by the federal government last year may help previous San Clemente home owners realize their goals of owning a home or condo in this fair city again – and in a much shorter time frame.
This program, run by the Federal Housing Administration (FHA), can help previous homeowners qualify for an FHA-insured mortgage on a new home purchase if they meet certain criteria. The main aspect to qualifying for this program is that potential borrowers must show that they lost at least 20% of their monthly incomes for a minimum of 6 months and that this income loss was the reason they defaulted on their previous home loans. Another qualifying point is that the borrower must have recovered from their previous income hardship and have maintained a clean credit record for at least one year. The potential borrower will still have to meet the standard debt-to-income ratio requirements necessary for any home loan, but showing these hardship and recovery factors will provide leniency from the lender with regards to the short sale or foreclosure on their record.
There are currently 43 San Clemente homes for sale that would qualify for an FHA-insured loan based on the maximum loan limit of $625,500. If you lost your San Clemente or condo due to economic hardship, we strongly recommend speaking with a lender to see if you may qualify for this program. The last several years have been hard on everyone, but there is always a light at the end of the tunnel – maybe this is the one you should follow.