Gino Blefari
Senior Vice President of HSF Affiliates
HomeServices of America, Inc

Boomerang buyers. It’s a nickname we’re seeing in the news lately that implies potentially good things for former homeowners and lenders alike.

A boomerang buyer is one who either went through foreclosure or a short sale during the housing downturn – and, thanks to a government program launched last year by the Federal Housing Administration, now may be able to buy a home again.

About 7.2 million homes have been lost to foreclosure since the downturn began about eight years ago. Many speculated that the dent in those homeowners’ credit and the sour taste of homeownership left in their mouths would leave them renting for decades.

But that seems to be changing already. And FHA’s Back to Work program is certainly a big help. The program enables former homeowners to qualify for low interest rates and a minimum of 3.5% down if they meet certain qualifications like proving their foreclosure or short sale was due to at least a 20% drop in income for a six-month period. They also need to show that they’ve taken steps to improve their credit histories in the last year.

While some may criticize the program and question why a lender would risk lending to a borrower with such a large stain on their mortgage history, others have said just the opposite. Many still believe that this pool of buyers who experienced a major housing setback actually includes some of the best candidates for homeownership. In many cases, they want to own a home again and are willing to do what it takes to get it.

Matt Weaver, a lender with PMAC Lending Services in Florida, told NBC News that about 20% of his current clientele either suffered a short sale or foreclosure in the past and are now looking to buy back into the market.

While the FHA program is helping to lift some of these buyers, it remains to be seen how much of a difference it will make in the overall demand for homes. But even if it’s not a significant overall boost, the good news is that foreclosure and short sale no longer mean the homeownership door is closed and locked forever for these buyers. And that’s worth noting.