New guidelines are being released and are effective August 16, 2014! Currently, buyers wait time after a Foreclosure or Short Sale is 2 years only to purchase again. The following regulations will be released by Fannie Mae. This will increase the wait time to 4 years regardless of down payment.
FORECLOSURE-New Guidelines:
· 7 year wait period before becoming eligible for Conventional Financing again. Lenders can manually override Fannie Mae’s Automated Underwriting System (DU) to “overlook” the Foreclosure if…..
· Extenuating circumstances can be documented (serious health issues with a wage earner or death of wage earner).
· AND the Foreclosure was completed at least 3 or more years from the day the Funds for the New Loan are Disbursed.
SHORT SALE-New Guidelines:
· 2 Year wait period terminated. Borrowers now required to wait 4 years post Short Sale to become eligible for Conventional Financing unless….
· Borrower meets criteria for Extenuating Circumstances can be documented
· For borrower’s meeting criteria for “Extenuating Circumstances” and who are 2 years outside of a Pre-Foreclosure Sale, Lender’s can manually override Fannie Mae’s Automated Underwriting System (DU) to “overlook” the Short Sale.
4 year wait period required. After 4 years, Borrower becomes eligible for 5% down Standard Conventional Guidelines.
7 year wait period, no longer required for 5% DOWN Standard Conventional Eligibility (Pending Release).
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