Purchasing a Home After Short Sale or Foreclosure!
Here are the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale or foreclosure: This information was sourced by the Fannie Mae and Freddie Mac selling guides along with the FHA handbook.
Short sale with FHA Loan
■Can purchase right away with no mortgage default
■3 year wait if in default at the closing
■Reduced wait if the borrower has re-established good credit and can show extenuating circumstances
Short Sale With Fannie Mae Loan
■2 year wait if the borrower puts 20 % down
■4 year wait if the borrower puts between 10% to 20% down
■7 year wait if the borrower puts less than 10% down
■2 year wait if the borrower can show extenuating circumstances and puts more than 10% down
Short Sale with Freddie Mac Loan
■4 year wait before being able to get a loan
■2 year wait if the borrower can show extenuating circumstances
Foreclosure with an FHA Loan
■3 year wait before being able to get a loan
■Reduced wait if the borrower can show extenuating circumstances and re-establishes good credit
Foreclosure with a Fannie Mae Loan
■7 year wait from the completed foreclosure sale date
■3 year wait if the borrower can show extenuating circumstances. Additional underwriting requirements apply for 4 years after a 3 year waiting period.
■7 year wait for a 2nd home, cash out re-financing, or an investment property
Foreclosure with a Freddie Mac Loan
■5 year wait from the completed foreclosure sale date
■3 year wait if the borrower can show extenuating circumstances
A deed in lieu of foreclosure follows the same guidelines as FHA’s foreclosure policy, the same as Fannie Mae and Freddie Macs short sale policy.
The difference between completing a short sale or going through a foreclosure in regards to purchasing another property in the future is the waiting time which is more favorable in a short sale. For more infromation or if you would like to sell your home as a Short Sale contact me at 813-545-3118.
