Fannie Mae announces new foreclosure guidelines: 7 years

The former policy was that 5 years was acceptable if certain requirements were met (down payment, occupancy), however today Fannie Mae announced that someone with a prior foreclosure will need to wait 7 years in order to obtain new financing with a Fannie Mae conventional/conforming mortgage.  The exception is if someone had extenuating circumstances that can be documented, then just a 3 year waiting period is required.  This does not apply to FHA or VA loans where the Fannie Mae underwriting system is being utilized, it only applies to Fannie Mae conventional/conforming loan programs.  Conforming loan programs have more stringent requirements than FHA, VA, etc.

Full details on Fannie Mae's announcement can be found at Fannie Mae Announcement SEL-2010-08