After a foreclosure, a home buyer must wait 3 years to reapply for a FHA mortgage loan while they must wait 7 years on a conventional loan. A buyer has to wait 2 years to reapply while using a VA loan. Similarly, there are different mortgage loan waiting periods for home buyers coming out of a bankruptcy or short sale.
Families raising a family are looking forward to the day when they can buy their own home. How long does one have to wait after a significant event like bankruptcy, foreclosure, short sale, loan modifications etc to qualify for different types of mortgage loans?
Here is an excellent summary prepared by Tyson Barry of Academy Mortgage.
Conventional | |
Foreclosure | 7 years from date completed to the disbursement date of the new loan |
Deed-in-Lieu of Foreclosure Pre-Foreclosure or Short Sale |
4 years from either the date of sale or from the completion date to the disbursement date of the new loan |
Prior Loan Modification | 2 years eligible with Fannie Mae DU approval |
Chapter 13 Bankruptcy | 2 years from discharge date 4 years from dismissal date |
Chapter 7 Bankruptcy | 4 years from discharge or dismissal date |
Multiple Bankruptcy Filings in the Last 7 Years | 5 years from last discharge or dismissal date |
Jumbo Loan | Follow requirements specific to the proposed loan product |
VA | |
Foreclosure Deed-in-Lieu of Foreclosure |
2 years from date completed and title transferred back to lender |
Pre-Foreclosure or Short Sale | 2 years from credit approval date to date sale closed and title transferred to new owner |
Prior Loan Modification | Must have a 12-month satisfactory credit history after the event |
Chapter 13 Bankruptcy | 1-year payout has elapsed with all payments made on time and permission obtained from court for new mortgage No wait time if discharged or dismissed |
Chapter 7 Bankruptcy | 2 years from discharge or dismissal date |
Consumer Credit Counseling | 1-year payout has elapsed, payments made on time, and agency permission for a new mortgage |
FHA | |
Foreclosure Deed-in-Lieu of Foreclosure |
3 years from date completed and title transferred back to lender |
Pre-Foreclosure or Short Sale | 3 years from the date of title transfer to FHA case number assignment |
Prior Loan Modification | No wait period, but past 12 months’ credit history must have no late payments |
Chapter 13 Bankruptcy | 1-year payout has elapsed with all payments made on time and permission obtained from court for new mortgage No wait time if discharged or dismissed |
Chapter 7 Bankruptcy | 2 years from discharge or dismissal date |
Consumer Credit Counseling | 1-year payout has elapsed, payments made on time, and agency permission for a new mortgage |
USDA | |
Foreclosure Deed-in-Lieu of Foreclosure |
3 years from date completed and title transferred back to lender |
Pre-Foreclosure or Short Sale | 3 years from credit approval date to date sale closed and title transferred to new owner Less than 3 years may be eligible if all mortgage and installment debt paid on time within the 12 months prior to the sale |
Prior Loan Modification | 3 years from modification completion date |
Chapter 13 Bankruptcy | 1-year payout has elapsed with all payments made on time and permission obtained from court for new mortgage No wait time if discharged or dismissed |
Chapter 7 Bankruptcy | 3 years from discharge or dismissal date |
Consumer Credit Counseling | 1-year payout has elapsed, payments made on time, and agency permission for a new mortgage |
When you are ready to buy ask about free home buyer grants available in Arizona, or check your own state for similar local programs. These grants do not have to be repaid and can be applied to a buyer's down payment and/or closing costs. Ready to move? See Arizona homes for sale or Scottsdale homes for sale.
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