Bankruptcy, Short Sale and Foreclosure
What are the waiting periods to be eligible to purchase a new home?
Although the housing and mortgage crisis was felt initially by many in 2007, many other homeowners and potential homeowners were able to keep their heads above water for several years by cashing out retirement accounts, borrowing money from friends and family, etc.
However, the economic downturn eventually caught up which led to bankruptcy filings, short sales, and foreclosures. Fortunately, the waiting periods to be eligible to purchase a home are not as long as many people think.
Below is a chart that can help potential buyers better understand the different timeline requirements for FHA, VA, USDA, and Conventional (Fannie Mae/Freddie Mac) financing:
As you can see, FHA and VA only require 2 years from the discharge date of a Chapter 7 Bankruptcy while Fannie and Freddie only require 4 years. And VA only requires 2 years after a Short Sale or Foreclosure!
There are a number of "Alt-A" programs that have much shorter waiting periods, for example, one day out of foreclosure or bankruptcy, but those Alt-A programs typically require larger down payments and carry much higher interest rates.
Not sure where you stand? Give me a call at 760-500-1919 and let's discuss your specific scenario. You might be closer than you think.