FHA has now shortened the waiting period for those very same buyers. Yes, of course, there is one caveat. You must prove that you had a loss of employment or a loss of income that was 'beyond your control'. And, it has to be an income loss of at least 20% and lasted for at least 6 months.
Of course you have to prove that you have completely recovered from the loss that caused the hardship. Meaning, since you can repurchase in as little as 12 months, you have to show that you've had a good payment history on things like mortgage (swear it says that), rent, or credit accounts.
Funny, since most borrowers have to show solid employment for 24 months, right?
Well, it is what it is. And, buying with FHA comes with permanent PMI these days, unless you can refi out of it into a conventional loan in the future.
This new goody actually went into effect 8/15/13 and continues through 9/30/16.
Is this a goody, or is it a baddy?