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A very common question in the mortgage industry lately is this; when can I buy a home after foreclosure, bankruptcy, or a short sale? With many people having  to foreclose and file for bankruptcy in the past few years, this has become quite a common topic. Most people do not know how long they must wait before jumping back into the housing market. The length of time you need to wait before being able to qualify for a house is dependent upon which loan program, or product, you choose. Each loan program has a different answer.
The housing crisis that we have experienced recently has caused many rules and regulations to change, regarding these situations.
Here is the up to date breakdown for the waiting period:
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Foreclosure |
Short SaleDeed-In-Lieu |
Ch. 7 Bankruptcy |
Ch. 13 Bankruptcy |
| Fannie Mae |
7 yrs from completion date. |
2 yrs with max 80% LTV ratio.4 yrs with max 90% LTV ratio.7 yrs > 90% LTV. |
4 years from discharge or dismissal date. |
2 yrs from discharge date.4 yrs from dismissal date. |
| Freddie Mac |
7 yrs from completion date.4-7 yrs max 10% down. |
4 yrs from completion date for short sale.4 yrs for deed-in-lieu |
4 years from discharge or dismissal date. |
2 yrs from discharge date. |
| FHA |
3 yrs from completion date. |
3 yrs from completion date. |
2 yrs from discharge date. |
1 yr of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage. |
| VA |
2 yrs from discharge date. |
No specific information on this yet, assume foreclosure rule of 2 years. |
2 yrs from discharge date. |
1 yr of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage. |
| USDA Rural |
3 yrs from completion date. |
3 yrs from completion date. |
3 yrs from discharge date. |
1 yr of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage. |
Once your waiting period is over you should begin looking at your credit report, and credit score. At least six months before you initiate any home buying transactions, you should be focusing on your credit report and score to make sure there are no discrepancies. A smart thing to do would be to contact a credit specialist, or your trusted mortgage adviser, to ensure you are on the right track. If you are interested in finding out more please call (925) 364-5210, or email rsinohue@guaranteedrate.com
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