When can I buy another house after foreclosure?

Mortgage and Lending with HomeTown Lenders

If it hasn’t happened to you, surely a friend or family member has had the unpleasant experience of foreclosure. One of the most common questions I receive is, “When can I buy another house after foreclosure?”

Yes, it is possible to buy another home after foreclosure, maybe sooner than you think. But it takes patience and planning.

FHA guidelines require a waiting period of three years from the date of the foreclosure before you are eligible to buy again. This will give you time to rebuild your credit. Remember, the underwriter will want to see that you have reestablished good credit.

Many of my clients have found their credit dropped as much as 200 points after foreclosure but by maintaining timely payments on their consumer debt over the three year waiting period are now back in the low 700s.

Those who lost their home to foreclosure in 2009 will be eligible in 2012 subject to the normal rules of qualification.

The rule for bankruptcy is that two years must have passed since discharge of Chapter 7 or 1 year on a Chapter 13 (requires permission from the bankruptcy trustee).

What about VA loans? They are a little more liberal than FHA, requiring only two years since foreclosure before becoming eligible again. The debt must be satisfied however, as it will affect your entitlement. It is best to check your current Certificate of Eligibility (CEO). Any VA lender can assist you with that.

If you would like a copy of this information please click the link below for downloadable PDF

FHA/VA Derogitory Credit Chart

Call me with your questions. I’d love to be of service.

Comments (2)

Tonya Jones
Solid Source Realty, Inc. - Lithonia, GA

Hi Hal, this is great information!  I work with short sales and my clients often ask when they will be able to buy another home.  Does the FHA guideline pertain to short sales as well?  What if the seller was not past due on the date that the short sale closed?  Any info you could provide regarding this would be greatly appreciated.

Jan 12, 2012 05:06 AM
Hal Tennant
HomeTown Lenders - Murfreesboro, TN
Get a Zero Down Mortgage - How to buy a home with no money down


With regard to Short Sales the FHA guideline is:

Borrower current at time of sale - no wait if all mtg and installment debts paid on time for 12 months prior to short sale

Borrower delinquent at time of short sale - 3 years from date of sale


P.S. There is a downloadable chart in the main article. Let me know if it doesn't work and I email one to you.

Jan 12, 2012 06:45 AM