GREAT NEWS for Short Sale Sellers!!
At last, FHA makes dramatic changes to it’s policy by announcing to it’s mortgagees that FHA will reduce the time homebuyers must wait to qualify for a FHA mortgage after a short sale, foreclosure or bankruptcy.
This news is HUGE!
Previously, a buyer had to wait 2 – 3 years or more before qualifying for a FHA loan. According to FHA Commissioner Carol Galante, "FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage."
A FHA mortgage applicant must also demonstrate that experienced an “economic event” which resulted in a reduction of household income by 20% or more and for a period no less than six months. They must also show that there has been a full recovery from the event as well as complete housing counseling.
Full details: Mortgagee Letter 2013-26
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