Buy home after Short Sale, Foreclosure & Bankruptcy

There are many factors that will affect your ability to qualify for a loan in order to buy a house again after a Short sale, Foreclosure or Bankruptcy. If you have taken good care of your credit since, paid all your bills on time in the last 12 months, have money saved for down payment (as little as 3.50% to 20% down payment), and of course, you have income to qualify after a short sale, foreclosure or bankruptcy, then yes, it is possible to buy a house again.

We have put together every available program for home owners after a short sale, foreclosure or bankruptcy that a home owner can qualify for.

9 Out of 10 Borrowers Use One of These Three Financing Options

Buyers today essentially have 3 options when it comes to obtaining financing. Currently more than 9 out of 10 mortgages are either funded by Fannie Mae/Freddie Mac, the FHA or VA! So if a buyer is looking to purchase and needs financing, it is more than likely they will be using one of these 3 financing options.

1. When Can I Repurchase Again After a Foreclosure?

Here are the time lines for when a buyer can repurchase again after a Foreclosure and they are trying to obtain either Conventional, FHA or VA financing.

IF YOU HAVE FORECLOSURE ON YOUR CREDIT

Conventional Loans

FHA Loans

FHA Back-to Work Loans

VA Loans

THEN WAITING PERIOD IS

7 Years From the Credit Report Date

3 Years From the Credit Report Date

1 Years From the Credit Report Date (must qualify under certain circumstances)

2 Years From the Credit Report Date

Conventional. It is 7 years before a buyer can repurchase again using Conventional financing.

FHA. It is 3 years before a buyer can repurchase again using FHA financing. Or, see below for how a FHA buyer can qualify again after just 1 year if they experienced an economic event.

FHA Back to Work . This program is 12 months out of a short sale with 12 months good payment history. Below are the requirements.

As low as 3.5% down.
12 months from short sale with 12 months good payment history.
Must be able to prove a min. of 20% reduction of income, job loss or something job related that caused the short sale.
Must be able to prove that you are no longer in financial difficulty.
Must take a HUD Approved Counseling 30 days prior to Applying.

VA. It is only 2 years before a buyer can repurchase again using VA financing.

2. When Can I Repurchase Again After a Short sale?

Here are the waiting period time lines for when a buyer can repurchase again after a Short Sale and they are trying to obtain either Conventional, FHA or VA financing.

IF YOU HAVE SHORT SALE ON YOUR CREDIT REPORT

Conventional Loans- Freddie Mac

Conventional Loans- Fannie Mae

FHA Loans

VA Loans

THEN WAITING PERIOD IS

4 Years From the Short Sale Closed Date on Credit Report

2 Years For Loans at 80% or below and 4 Years for Loans between 80%-90% and 7 Years for Loans between 91%-95% From the Short Sale Closed Date on Credit Report

3 Years From the Short Sale Closed Date on Credit Report

2 Years From the Short Sale Closed Date on Credit Report

FHA. It is 3 years before a buyer can repurchase again using FHA financing.

FHA TIP: The FHA has a loophole that not many people know about, if the FHA buyer did not have any late payments before their short sale, they are allowed to automatically qualify again for FHA financing.

New FHA Short Sale Rule for 2014. The FHA announced in late 2013 they have reduced the time line that buyers must wait after a bankruptcy, foreclosure or short sale before qualifying for an FHA-backed mortgage, if a buyer experienced an “economic event” whereby their household income fell by 20% or more for a period of at least six months.

The period had previously been two years following a bankruptcy, and three years following a foreclosure or short sale. The agency has now reduced the waiting period to ONE YEAR.

VA. It is only 2 years before a buyer can repurchase again using VA financing.

Conventional. Until recently it was 4 years before a buyer can repurchase again using Conventional financing.

Conventional TIP: Fannie Mae has implemented a new rule that allows buyers to repurchase again using conventional financing after only 2 years instead of 4, as long as they put 20% down

3. When Can I Repurchase Again After Bankruptcy?

Here are the waiting period time lines for when a buyer can purchase again after a Bankruptcy and they are trying to obtain either Conventional, FHA or VA financing.

IF YOU HAVE BANKRUPTCY ON YOUR CREDIT REPORT

Chapter 7- Conventional Loans

Chapter 13- Conventional Loans

Chapter 7- FHA Loans

Chapter 13- FHA Loans

Chapter 7- VA Loans

Chapter 13- VA Loans

THEN WAITING PERIOD IS

4 Years From the Discharged Date on Credit Report

2 Years From the Discharged Date on Credit Report

2 Years From the Short Sale Closed Date on Credit Report

Conventional. For a chapter 7 Bankruptcy it is 4 years and 2 years for a chapter 13 bankruptcy, before a buyer can repurchase again using Conventional financing.

FHA. For a chapter 7 Bankruptcy it is 2 years and 2 years for a chapter 13, before a buyer can repurchase again using FHA financing. Or, see above for how a buyer can qualify again after just 1 year if they experienced an economic event.

VA. For a chapter 7 Bankruptcy it is 2 years, and 2 years for a chapter 13 bankruptcy, before a buyer can repurchase again using VA financing.

We can manually underwrite your loan if your situation is unique from the above mentioned situation. So please contact us directly at 703-349-1084 for further assistance.