What is my waiting period after a Post Foreclosure, Short Sale, Bankruptcy, and Loan Type? Phoenix Arizona, Ahwatukee Arizona
Many former home owners who have filed bankruptcy, experienced a short-sale or foreclosure, often email as to when they would qualify for a home loan again. This is a very important topic, many times when clients ask this question; they come into frustrating answers that are vague and non-factual. I hope to address these topics.
The steps to owning again will be contingent on what I call, The Waiting Period Factors. 
These factors are as follows:
- The reason why the person lost their home. We have to ask if it was due to a Short Sale or a Foreclosure or Deed in Lieu and did the client file a bankruptcy?
- The future financing they will use to obtain a loan.
- Credit check to repair credit if necessary.
- Saving for a strong down payment.
- Saving for closing costs to close the transaction. Note: since it is a buyer’s market, the seller often pays some or the entire buyer’s closing cost.
Below you will find a matrix of the Waiting Periods (this matrix is subject to change at any time). For example, Fannie Mae will allow someone to purchase again in two years if they went through a short sale and have 20% down as a down payment. FHA (Federal Housing Administration) will allow someone to use FHA financing in three years if they went through a foreclosure or short sale.
FHA also has extenuating circumstances in which if someone went through a short sale and never missed a payment they may purchase immediately with FHA. Many times this is due to the market, not everyone who experiences a short-sale is delinquent, many times a relocation of employment forces a homeowner in a bad market to Short Sale their home due to a upside down market.
What is my waiting period after a Post Foreclosure, Short Sale, Bankruptcy, and Loan Type?
APPENDIX A
WAITING PERIOD MATRIX FOR POST FORECLOSURE, SHORT SALE, BANKRUPTCY, AND LOAN TYPE
|
Occurrence |
Fannie Mae |
FHA |
VA |
USDA Rural |
Jumbo* |
|
Foreclosure |
7 years from completion date |
3 years from completion date |
2 years from completion date |
3 years from completion date |
5-7 years from completion date |
|
Short Sale |
2 years with Max 80% LTV ratio 4 years with max 90% LTV ratio 7 years LTV per eligibility matrix |
3 years from completion date
**Per FHA ML 09-52, FHA financing can be obtained in less than 3 years under certain conditions.* |
No specific information on this yet, assume foreclosure rule of two years |
3 years from completion date |
5-7 years from completion date. |
|
Chapter 7 Bankruptcy |
4 years from discharge or dismissal date |
2 years from discharge date |
2 years from discharge date |
3 years from discharge date |
4-7 years from completion date |
|
Chapter 13 Bankruptcy |
2 years from discharge date 4 years from dismissal date |
1 year of the payout must elapse and payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage |
1 year of the payout must elapse and payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage |
3 years from discharge date |
4-7 years from completion date |
***Waiting period time frames may be less in situations with extenuating circumstance. *Jumbo waiting periods may vary by lender.
Rev. 10/2010
If you have any further questions, or need expert advice please contact me.
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