Credit Benefits of a Short Sale

A short sale will have a lesser impact on your ability to re-establish your credit history than a foreclsure or bankruptcy.  See below:

Here is a summary of Fannie Mae loan policies that went into affect on August 1, 2008.  This represents the time period that must elapse before borrowers can demonstrate they have reestablished an acceptable credit history after the occurrence of the bankruptcy or foreclosure. 

2 yrs - Preforeclosure Sale (aka Short Sale)

2 yrs - Bankruptcy Chpt 13 (reorganization) - case discharged (completed)

4 yrs - Bankruptcy Chpt 13 (reorganization) - case dismissed (not completed)

4 yrs - Bankruptcy - All others, not Chpt 13

4 yrs - Deed-in-Lieu of Foreclosure

            ADDITIONAL REQUIREMENTS up to 7 yrs after

                - The greater of 10% down payment or minimum down payment required

                - Limited cash-out refinances

5 yrs - Multiplbe Bankruptcy filings

5 yrs - Foreclosure

            ADDITIONAL REQUIREMENTS up to 7 yrs after

                - Min 10% down payment and credit score of 680           

                - No second homes or investment properties

                - Limited cash-out refinances, but only if eligibility requirements