Very interesting question for VA mortgage holders. If you have a short sale, can you use your VA eligibility again to purchase a home? If so what are the requirements?
We just answered a question from a Veteran that went something like this, "I sold a home last year that had two mortgages. The first mortgage was paid in full, the second mortgage was not. Can I get a VA Loan now that it's been more than 12 months?"
There are two really, really important facts that we need before we can answer the Veteran's question.
The first one is - why did you short sale the home? Strategic Short Sales are not going to sit well with an underwriter, and could be the basis for denying the loan.
Additionally, since it's been 12 months, we need to know if there were any late payments on the mortgage prior to the Short Sale. If there were missed payments, then VA will make us wait three years before we can do another VA Mortgage Loan.
Since it was a first mortgage that was paid in full, it is unlikely that the Veteran has a delinquent FHA, VA or USDA mortgage loan balance showing. If there WAS a delinquent Government loan balance - you would not be eligible for another Government Insured Loan.
The Veteran in this case has a credit score of 660, and the second mortgage does not show a deficiency balance owed, but it does clearly show on the credit report as a short sale. The reason for the move was because the Veteran lost their job in Florida and relocated to NC with a job they've now held for over a year (same line of work). In this case, the Veteran never missed a payment on the mortgage - they simply did not have cash (they'd been living on savings while looking for a job) to cover the $25,000 short on the second mortgage.
In a case like this - 12 months must pass from the time of the short sale, and the application for a VA loan. Our underwriters require that we get some sort of statement from the Second Mortgage Holder indicating that they are not going to file a deficiency balance against the Veteran... we ARE able to make this loan.
If you've had a short sale, and you want to know if you can now purchase a new home in North Carolina - call Steve and Eleanor Thorne, FFSI, 919-649-5058 - we have the best mortgage rates and the lowest fees available!