The FHA has updated their policy and guideline manual to now include a program being called the "Back to Work - Extenuating Circumstances" program. This program allows home buyers to purchase a home with as little as 1 year of being out of a bankruptcy or foreclosure.

This fha loan is manually underwritten which means it may be hard for a borrower to find a lender as many lenders shy away from manual underwrites as it opens up the doors for them to buy back the loan if the borrower defaults.

In order to qualify for this program you must be able to document your extenuating circumstances with a written termination notice, unemployment income or verification of your employment and income being reduced by 20 percent or more. An extenuating circumstance, as defined by the FHA, refers to the loss of employment, loss of income, household income reduced by 20 percent or more and/or the event lasted for a period of 6 months or longer.

The first thing you should do after a bankruptcy or foreclosure is to get a free copy of your credit report. Many time after a bankruptcy or foreclosure there will be misreporting items as there is a lot of action being take on your credit at one time. By reviewing your credit report you can make sure everything is reporting correctly, fix thing that are not and have a better understanding at what you need to do in order to improve your credit score to increase your chances of buying a home on this program.

Jeremy Redlinger G+ Author