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New FHA Guidelines Shorten Time To Get Back In Housing Market

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(Photo by Scott Olson/Getty Images)

(Photo by Scott Olson/Getty Images)

DENVER (CBS4) – New Federal Housing Administration guidelines are reducing the amount of time homeowners need to sit on the sidelines after losing their homes. The move should allow many people to get back in the housing market, but there are prerequisites.

Typically someone has to wait three years before they can buy another house. But now someone who lost their home just last summer could potentially qualify to buy a home today.

“We decided that in order for us to really be able to recover and get out of water, the best thing would be to short sell,” Erica Jenkins said.

When CBS4’s Suzanne McCarroll first met Jenkins she was relieved to be sitting on the porch of the house she was renting. She had sold the home she owned nearby in a short sale after the recession took a toll on the family income.

“It was a business decision and was tough. We both had a decrease in income with the economy, and it’s actually amazing that within a year we could potentially go buy a new home,” Jenkins said.

Until now families like the Jenkins’ had to wait three full years to get back in the housing market. Now the FHA has reduced the penalty time to just 12 months, but certain requirements must be met. Many people lost their homes because they lost their jobs. Now those back on the employment rolls can be back in the housing market.

Realtor Jordan Connett is already on the phone with clients anxious to stop renting a house and start owning again.

“It’s opening an ability for them to be able to buy and live in a larger property for the same value,” Connett said. “And the other big thing is the tax benefits of owning home are enormous.”

While some of the requirements have eased up, potential buyers still need to show steady income and have a good credit score.”

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