Young couple planning for buying a house after foreclosureQ: My husband and I lost our home to foreclosure in October, 2007 after my husband lost his job. We really want to become homeowner’s again and were wondering about the benefits of signing up with one of the non-profit housing agencies that offers a fix-up-your-credit program. Do you know anything about them and if so, would this be a good idea?

A: I’m sorry that you and your husband had such a reversal of fortune and had to lose your home. The economy has been difficult for so many people on so many levels. Entire families have been wiped out.

It sounds as though you are on your way to a recovery. That’s great to hear.

In the wake of the foreclosure crisis, secondary mortgage market leaders Fannie Mae and Freddie Mac instituted a requirement to make those homeowners who had been foreclosed on wait five years before being able to qualify for a mortgage. You’re almost at four years, so in another year, you would be able to qualify.

You might be able to qualify sooner with an FHA loan, especially if you purchase a HUD home (HUD homes are FHA foreclosures and you can shop for them at

Start by pulling a copy of your credit history from each of the three credit reporting bureaus, Equifax, Experian, TransUnion. You can do this at their websites or you and your spouse are each entitled to one free credit report from each credit reporting bureau once a year through While your credit report is free, you’ll have to pay about $9 for a copy of your credit score.

While it’s been four years since your foreclosure, you might find your credit history isn’t quite repaired yet. If your credit score is hovering in the 500 range, it will be tough for you to qualify for any loan. Once your credit score rises above 620, you’ll have a better chance although you will still be considered a subprime borrower.

I don’t know what these nonprofit credit programs would do for you, so you’ll have to investigate it. See what promises are being made and investigate the company very carefully. How much does this program cost? Does it have special relationships with lenders that will allow you to qualify more quickly for a home loan? If you have to pay to participate, you might just be better off waiting the year, saving the money, improving your credit and then trying to buy a house once your five year waiting period is up.

In another year or so, you should be able to qualify on your own. If you’re ready to start looking now, try to find an owner who is willing to do a lease with an option to buy (also known as a lease/purchase). You can rent the property for a year while you wait to qualify for a mortgage. Better yet, perhaps the owner will finance your purchase, and you will be able to purchase a home immediately.

Good luck.