A recent change in FHA guidelines now allows homeowners who have previously foreclosed on a home to get approved for financing. This "rule" change replaces the prior 2-4 year waiting period that borrowers were having to wait in order to even be considered to as little as 1 year.

As the change is instituted, some of the requirements are being posted on FHA and Government websites. The new borrowers will be required to show that there was an economic event that led to the default of their mortgage. This is described as a loss of employment or income and they will be expected to complete "housing counseling". There will also be a required credit rating, so the borrowers must show that they are now fiscally responsible and have since made adjustments to correct the errors that caused the default.

One of the main concerns with this change is the implication of the sub-prime lending crisis that took such a toll on our economy. These potential borrowers have a proven track record of living well beyond their means and as such defaulted on an important investment. This is causing a lot of the bigger institutions to take caution in regards to participating in this new adjustment to the rules. However there are more and more "modified" bank specific programs that are becoming available every day that fall into the FHA new home purchase program.

In the next few years there will be more and more available programs that are designed to help individuals who have gone through a hardship and are just looking to get their feet back under them. Owning a home is still one of the pillars of the American Dream and it should be available to everyone.