Boomerang Buyers are Back After Foreclosure

Real Estate Broker/Owner with Vision Realty

Boomerang Buyers are Back After Foreclosure Means New Life for Homeowners


Happy Home buyer after short saleA boomerang buyer are those reentering the housing market after a foreclosure or short sale. We are seeing a lot of people back on the market after suffering a short sale just a few years ago. Many of these people are now qualifying for an FHA (Federal Housing Administration) loan. According to John Burns Real Estate Consulting, buyers who lost a home due to foreclosure or a short sale between 2007 and 2013 are projected to make up about 10% of all US home sales over the last year. The Washington DC area is among one of those regions expected to have higher levels of activity with boomerang buyers. In 2015 and 2016, these homebuyers will increase as more former owners become eligible for new loans.


How quickly someone can bounce back from a foreclosure or short sale depends on the reason they suffered financial hardship in the first place. A distressed borrower who had good credit history before they lost a job could be more likely to qualify for a new mortgage than someone who may have suffered because of bad credit and continues to demonstrate poor financial habits.

Hardships can include a death, medical bills, job loss or relocation, all of which may have nothing to do with credit history. Many of these boomerang buyers are being even more cautious as they don't want to get in over their heads. These buyers are sticking to a budget that they can comfortably afford rather then reaching too far beyond the means of a reasonable monthly payment.


FHA loans can be easier to obtain for home buyers after a short sale. In some cases, borrows may not even have to wait at all if they've never had late payments on their mortgage. However, borrowers in default or had delinquent payments may have to wait up to three years in order to qualify for an FHA loan.

VA loans, guaranteed by the Department of Veterans Affairs, offers the most lenient of rules with just a two-year waiting. And no down payment is required.

Conventional loans require a two-year waiting period after a short sale as long as borrowers can make a 20% down payment. That weight is extended to four years with a 10% down payment and seven years with the 5% down payment. If a homeowner lost their home due to a foreclosure and typically this means they were in default on the mortgage they must wait seven years in order to qualify for a new conventional loan.


Distressed home buyersAgain, extenuating circumstances could change all of these figures and it really depends on the borrower, their credit history and the reason for their financial distress. Many loans are dependent on a case-by-case basis. The Back to Work loan program that was launched in 2013 offers options for borrowers that lost their home due to the housing crisis and recession but the program requires housing counseling before a new loan can be approved.


If you're interested in learning about your options on borrowing again after a foreclosure or short sale feel free to give me a call at any time. I would be happy to ask some questions and find out which program might work best for you. I work specifically in the Columbus area, Gahanna, Lewis Center and surrounding towns and cities in Franklin County OH.

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columbus, lewis center and gahanna real estate

Columbus Ohio real estate - Vision RealtyAs a certified Realtor® for the top-rated Columbus Realty Firm - Vision Realty, with 32 years of dedicated real estate experience, I can help buyers, sellers, investors, short sale sellers and more find, sell or invest in the right property, at the right price, at the right time. Contact me anytime for updates and information on the Columbus OH Real Estate market.


Donald Payne - Vision Realty, Inc.
4608 North High Street

Columbus, OH 43214

Toll-free: (866) 510-2223

Cell: (614) 323-4348
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Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

Great  post DP have a great week

Jan 28, 2015 05:38 AM #1
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Donald - This is good news for the real estate industry.

Jan 28, 2015 06:08 AM #2
Michael Dagner
Brokers Guild Classic - Denver, CO
Your Denver Homes Realty Expert

Hi Donald, very nice post.  One shouldn't assume they can't get financing and a house.  The options are looking pretty good just a few years out from a distress sale.

Jan 28, 2015 08:50 AM #3
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