Waiting Period to Purchase After a Short Sale or Foreclosure

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Depending on which lending institution you ask you will receive different time-frames allowed to purchase again after a short sale or foreclosure. The reason is some lenders have credit overlays, which translates into stricter underwriting guidelines than Fannie Mae and FHA have published.  The following guidelines are as written in the governmental agencies published underwriting manuals.



There are lesser time-frames allowed if there are documented Extenuating Circumstances involved. These are events beyond the control of the borrower, such as a serious illness or death of a wage earner, and the borrower has re-established good credit since the foreclosure. Divorce, loss of employment, inability to sell the property and job transfer or relocation does not qualify for extenuating circumstance. All other events are known as Financial Mismanagement.



Fannie Mae

Foreclosure: 7 Years

Deed-in-Lieu/Short Sale: 2 Years with 80% LTV /4 Years with 90% LTV

FHA

Foreclosure: 3 Years

Deed-in-Lieu/Short Sale: No Waiting Period *

*If the borrower was current on their mortgage and all other installment debt for the 12 months preceding the short sale, the subject property is not in the same geographical area as the short sale and the short sale lender accepted the short sale as payment in full.

Deed-in-Lieu/Short Sale: 3 Years*

*It is treated as a foreclosure if the borrower was late on the mortgage and other installment debt for the 12 months preceding and at the time of the short sale. In addition, if the borrower pursued the short sale to take advantage of the declining market or purchased at a reduced price a similar or superior property within a reasonable commuting distance.

You now have the most current guidelines published by the two government agencies without any credit overlays attached.

If you have questions or know someone that may considering buying, call me today! 951-821-6683 or go to http://Jeff4Homes.net


Thank you to The Kevin Budde Team for the content

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