I get this question all the time, and there's a lot of misinformation floating around out there, so I decided to get you some clarification. This is as of 8/1/08.
Please note, this is Fannie Mae's Guidelines, so FHA, VA, and other types of loans will differ.
Chapter 7 Bankruptcy (liquidation): 4 years from the discharge or dismissal date
Chapter 13 (repayment plan): 2 years from discharge (paid as agreed) or 4 years from dismissal (kicked out) Extenuating Circumstances: reduced to 2 years.
Multiple Bankruptcies: 5 years (exceptions may reduce it to 3 years)
Foreclosure: must wait 5 years from the date of completion, and then from years 5-7, must put minimum 10% down and must have a credit score of 680 or more. Primary residence only. (extenuating circumstances can reduce it to 3%)
Deed-in-lieu-of-foreclosure: must wait 4 years from the date you deed property back to lender. Then from year 4-7 may require a larger downpayment. (extenuating circumstances: reduced to 2 years, but still may need larger downpayment from year 2-7)
Short Sale / pre-foreclosure sale: 2 years with no additional requirements or guidelines. (no extenuating circumstances)
As you can see from the guidelines, in Fannie Mae's eyes, a short sale is better than a deed in lieu, and a deed in lieu is better than a full-blown foreclosure. Hopefully this will help folks out who are facing tough decisions.
Here's a link to see FNMA's guidelines as they went into effect on 8/1/08
AndyTolbert
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