When Can I Buy a Home After a Foreclosure? Bankruptcy? Short Sale?

Mortgage and Lending with LendSmart Mortgage NMLS 209673 / 210042

When Can I Buy a Home After a Foreclosure? Bankruptcy? Short Sale?

 If you've recently experienced foreclosure, bankruptcy or a short-sale, you are  wondering when you'll be able to purchase a home again. Now when I say purchase a home, I mean doing so with the aid of a mortgage; obviously you can buy a home with cash at any time if you've got the funds yourself.

 One of the most common questions I'm asked as a Mortgage Loan Officer is; "How long after a ______ can I purchase a home?"

 Well there is an answer, BUT it takes some explaining to get there. Luckily you've come to the right place. FHA & VA are Government "Guaranteed" loans and Fannie Mae and Freddie Mac are known as Conventional loans. They each have their OWN minimum standards or Guidelines. To add to the confusion, different Lenders can, and DO, add their own more strict guidelines on top of these called "Over-Lays".

There has been more changes in the Mortgage industry in the last year and a half than ever before. These changes at times seem to come monthly or even weekly. It has been VERY hard to keep up with. SO, as of TODAY, below are the "CURRENT" guidelines:

 Loan Type       Bankruptcy                Foreclosure*              Short-Sale

   FHA                    2 years                         3 years                         3 years 

   VA                      2 years             2 yrs/May Loose VA**         2 years 

  Conventional    4 years                         5 years                         2 years 

   USDA               3 years                         3 years                         3 years 

*  In the case of foreclosure, The waiting period begins once change of ownership has been RECORDED.

** If the foreclosure was on a VA loan, full entitlement may not be  restored.

Posted by

 Ed & Barbara Heiser /  The Heiser Team      Licensed Mortgage Professional


Ed & Barbara Heiser   SFR
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Comments (6)

Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

Ed & Barbara - Thanks for clarifying - this is a very helpful post.

Jan 16, 2011 11:10 AM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Ed & Barbara, As far as I understand the correct answer would still be "it depends".

Jan 16, 2011 11:13 AM
Steve Ewing - Keller Williams Realty
Keller Williams - Stockton, CA

Thank you for the update.  Maybe a website with the latest loan rates and the latest times you can get a loan under certain circumstances is called for.  Thanks for the blog.

Jan 16, 2011 11:15 AM
Ed & Barbara Heiser
LendSmart Mortgage - Mesa, AZ
VA FHA USDA & Conventional Home Loans

Carla - THX alot! We will keep working to get the info out on these common frequently asked questions. MANY more to follow :-) Ed

Jan 16, 2011 11:56 AM
Ed & Barbara Heiser
LendSmart Mortgage - Mesa, AZ
VA FHA USDA & Conventional Home Loans

Jon- Believe me I totally understand how frustrating these times are in the current market!!! But, the fog appears to be lifting and the answers are available. The key is working with the mortgage professionals who put forth the effort to STAY informed and current. This eliminates the frustration for ALL parties involved. Ed

Jan 16, 2011 12:02 PM
Mark Organek
And the United States of America - Mesa, AZ
It's not a game, it's your life.

Ed & Barbara - Happy New Year! Great update and post for all of us REALTORS out there.  Good luck this 2011 year!

Jan 21, 2011 04:38 PM