Can I buy a home immediately after a short sale? The answer is yes.
The other day I received a call with this exact question from a Woodbridge, VA short seller. I answered, "Yes you can with FHA, if you meet the following qualifications":
- Home short sold cannot be a FHA loan
- Must have been current on mortgage at time of sale
- Sold home must not require deficiency payment for the difference
- 620 minimum credit score
- 3.5% down payment
- Short sale caused by extenuating circumstances and not just a person trying to take advantage of the market (by selling short and buying same type home at half the price)
The last requirement of extenuating circumstances is where it gets cloudy. An extenuating circumstance, according to FHA is one of the following:
- Job loss or loss of income
- Sickness or illness of the borrower
- Death of a wage earner
- Circumstances beyond your control
-Fannie Mae Conventional 2 years with 20 percent down payment
-FHA- 3 years from time of sale
As we continue to be in this market of short sales and foreclosures look for more lending guidance to come with hopefully shorter time frames. Buyers should not be punished or kept out of the market for situations beyond their control.