Can I Buy a House after a Short Sale or Foreclosure?

By
Real Estate Agent with RE/MAX Dallas Suburbs TX Broker 0513551
Short Sales 101

This is a common question among distressed homeowners we work with. It’s an easy question to ask, but the answer is complicated and constantly changing.

There are many variables involved when trying to figure out when someone will be able to purchase a home after a foreclosure or a short sale; however, the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale or foreclosure are:

Short Sale with FHA loan • Can purchase right away with no mortgage default/late payments • 3 year wait if in default or late payments at the closing • Reduced wait if the borrower has re-established good credit and can show more qualifying circumstances *

Short Sale with Fannie Mae Loan • 2 year wait if the borrower puts 20 % down • 4 year wait if the borrower puts between 10% to 20% down • 7 year wait if the borrower puts less than 10% down • 2 year wait if the borrower can show extenuating circumstances and puts more than 10% down *

Short Sale with Freddie Mac Loan • 4 year wait before being able to get a loan • 2 year wait if the borrower can show extenuating circumstances *

Foreclosure with an FHA Loan • 3 year wait before being able to get a loan • Reduced wait if the borrower can show extenuating circumstances and re-establishes good credit *

Foreclosure with a Fannie Mae Loan • 7 year wait from the completed foreclosure sale date • 3 year wait if the borrower can show extenuating circumstances. Additional underwriting requirements apply for 4 years after a 3 year waiting period. • 7 year wait for a 2nd home, cash out re-financing, or an investment property

Foreclosure with a Freddie Mac Loan • 5 year wait from the completed foreclosure sale date • 3 year wait if the borrower can show extenuating circumstances *

*Qualifying/Extenuating circumstances are not applicable in most situations

This list does not cover all circumstances so always talk with an experienced mortgage professional about your specific situation.

Tom Branch, Broker, CDPE, SFR

Source: Can I Buy a House after a Short Sale or Foreclosure? << The Branch Team

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Tom Branch and Gina Branch, The Branch Team with RE/MAX Dallas Suburbs, service the greater North Dallas suburbs including Dallas, Plano, Allen, McKinney, Frisco, Lewisville, and Carrollton.  While Gina concentrates on traditional listings and buyer/tenant representation, Tom specializes in assisting distressed homeowners to avoid foreclosure.  Tom and Gina have published two books (Achieving Rock Star Status and The Field Guide to Short Sales) and are available for speaking engagements in the greater Dallas - Fort Worth Metroplex. Subscribe to The Branch Team Blog.

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Important Notice: The Branch Team with RE/MAX Dallas Suburbs is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Mike Cooper, GRI 10/23/2011 04:14 AM
  2. Mary Macy 10/23/2011 04:01 PM
Topic:
Lending / Financial
Location:
Texas Collin County Plano
Groups:
RE/MAX Active Rain Bloggers
Texas Real Estate
Collin County, TX Real Estate Professionals
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Tags:
foreclosure
mortgage
short sale

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Rainmaker
1,009,589
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Wow!  I've never seen the re-purchase after a short sale associated with how much they are willing to put down on the next purchase.  Interesting. Thanks for the details. 

Oct 23, 2011 04:17 AM #1
Rainer
423,083
Peggy Chirico
Prudential CT Realty - Manchester, CT
REALTOR® 860-748-8900, Hartford & Tolland County Real Estate

This is interesting information, Tom.  Are you saying someone shortsale a current home and then repurchase another home right away?

Oct 24, 2011 01:39 AM #2
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