Loan Information
Preparing to Buy Again after BK, Short Sale or Foreclosure
September 6, 2011 by Jeff Thomas · Leave a Comment
Fairfax, VA – You will most likely need to wait. Unless you can find a local program that allows a BK, small bank, or credit union that will hold the mortgage on their books.The BK guidelines have become more strict over the past couple of years since the losses started to mount for FHA, VA and Fannie/Freddie. I have posted the guidelines Government programs first followed by the conventional guidelines.2011 FHA Waiting Guidelines
Bankruptcy – FHA will allow origination of an FHA insured loan after your bankruptcy has been discharged for two years with a Chapter 7 Bankruptcy.A Chapter 13 bankruptcy must discharged for at least one year before you can apply for an FHA insured loan.Foreclosure - You need to wait three years to apply for an FHA insured loan after the sale/deed transfer date.Short Sale / Notice of Default – You need to wait three years to apply for an FHA insured loan after the sale date of your foreclosure. As of right now, FHA treats a short sale and a foreclosure the same.New Credit must be re-established your score should be in the 640 range, the higher the score the better.
2011 VA Waiting Guidelines
Bankruptcy - You need to wait two years from your bankruptcy discharge to apply for a VA guaranteed loan.
Foreclosure - You need to wait two years from your foreclosure before you may apply for a VA guaranteed loan.Short Sale - If the short sale loan was a conventional loan you may apply for a VA guaranteed loan two years. If the short sale loan was a VA loan then restrictions apply. If the VA lost money on the short sale, this loss will most likely have to be cured before a new VA loan will be guaranteed.New Credit must be re-established your score should be in the 620 range, the higher the score the better.2011 Conventional Waiting Guidelines (Fannie Mae)
Bankruptcy – For a Conventional Fannie Mae / Freddie Mac loan, you currently must wait four years from your bankruptcy discharge date.Foreclosure - Conventional loans, Fannie Mae / Freddie Mac loans require seven years after the sale date of your foreclosure. Additional qualifying requirements may apply,Short Sale / Notice of Default – Currently treated the same as a foreclosure with a waiting time of seven years before you can buy again using a Fannie Mae conventional home loan.New Credit must be re-established your score should be in the 660 range, the higher the score the better. Fannie Mae and Freddie Mac currently like scores over 740 for all of their loan products.Fannie Mae has reduced waiting periods in cases of extenuating circumstances – The death of a primary wage earner seems to be the only one I have been able to identify up to this point.
You should review your credit at least six to nine months before you begin looking for a home so any credit issues will have time to be cured.
I hope this helps.
