I have been getting a lot of calls lately from clients, my referral partners, and Real Estate Agents with questions regarding seasoning post foreclosure or short sale. So I thought I would create a blog post with exact timeframes.
This should help you better understand when a client who has Foreclosed, Short Sold, or filed for Bankruptcy can re-enter the market to buy.
Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy
FHA LOANS
-Foreclosure - 3 years (can be reduced if there are "extenuating circumstances").
-Deed-in Lieu - 3 years (can be reduced if there are "extenuating circumstances").
-Short Sale - 3 years (can be reduced if there are "extenuating circumstances").
-Bankruptcy (Chapter 7) - 2 years from bankruptcy discharge (can be as low as 1 year if there are "extenuating circumstances").
-Bankruptcy (Chapter 13) - 2 years from bankruptcy discharge for automatic approval, but can be as low as 1 year after first bankruptcy payments made if all payments were made on time as agreed and the bankruptcy trustee approves the borrower's new mortgage loan.
VA LOANS
-Foreclosure - 2 years.
-Deed-in Lieu - 2 years.
-Short Sale - 2 years.
-Bankruptcy (Chapter 7 or 11) - 2 years from bankruptcy discharge (can be reduced to 1 year if there are "extenuating circumstances" and credit has been re-established).
-Bankruptcy (Chapter 13) - 2 years from bankruptcy discharge for automatic approval, but can be as low as 1 year after first bankruptcy payments made if the borrower made all payments on time as agreed and receives permission from the bankruptcy court.
CONVENTIONAL LOANS (Meets Fannie Mae (FNMA) and Freddie Mac (FHLMC) Loan Purchasing Guidelines)
-Foreclosure - 7 years for full eligibility with Fannie Mae and Freddie Mac. If there are "extenuating circumstances" the waiting period with Fannie Mae can be reduced to 3 years with partial eligibility for loan-to-value (LTV) of up to 90%. The "extenuating circumstances" the waiting period with Freddie Mac is 3 years.
-Deed-in Lieu - 7 years for full eligibility with Fannie Mae and 4 years for Freddie Mac. Partial eligibility with Fannie Mae is available after 4 years for up to 90% LTV and 2 years for up to 80% LTV. If there are "extenuating circumstances" the waiting period with Fannie Mae can be reduced to 2 years with partial eligibility for loan-to-value (LTV) of up to 90%. The "extenuating circumstances" the waiting period with Freddie Mac is 2 years.
-Short Sale - 7 years for full eligibility with Fannie Mae and 4 years for Freddie Mac. Partial eligibility with Fannie Mae is available after 4 years for up to 90% LTV and 2 years for up to 80% LTV. If there are "extenuating circumstances" the waiting period with Fannie Mae can be reduced to 2 years with partial eligibility for loan-to-value (LTV) of up to 90%. The "extenuating circumstances" the waiting period with Freddie Mac is 2 years.
-Bankruptcy (Chapter 7 or 11) - 4 years from bankruptcy discharge or dismissal with Fannie Mae (can be as low as 2 years if there are "extenuating circumstances"). 4 years from bankruptcy discharge or dismissal with Freddie Mac (can be as low as 2 years if there are "extenuating circumstances").
-Bankruptcy (Chapter 13) - 2 years from bankruptcy discharge (4 years from bankruptcy dismissal) for automatic approval with Fannie Mae or Freddie Mac. Can be reduced to 2 years with Freddie Mac if there are "extenuating circumstances".
Please feel free to call me should you have any questions
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