These guidelines have changed quite a bit over the past three years (becoming more strict) and are accurate as of the date of today’s post (March 9, 2012) –
2011 FHA Waiting Guidelines
- Bankruptcy – You may apply for a FHA insured loan after your bankruptcy has been discharged for TWO (2) years with a Chapter 7 Bankruptcy. You may apply for an FHA insured loan after your bankruptcy has been discharged for ONE (1) year with a Chapter 13 Bankruptcy
- Foreclosure - You may apply for a FHA insured loan THREE (3) years after the sale/deed transfer date.
- Short Sale / Notice of Default – You may apply for a FHA insured loan THREE (3) years after the sale date of your foreclosure. FHA treats a short sale the same as a Foreclosure for now.
- Credit must be re-established with a 640 minimum credit score
2011 VA Waiting Guidelines:
- Bankruptcy - You may apply for a VA guaranteed loan TWO (2) years after a Bankruptcy
- Foreclosure - You may apply for a VA guaranteed loan TWO (2) years after a foreclosure
- Short Sale - You may apply for a VA guaranteed loan TWO (2) after a short sale, unless it was a VA loan then restrictions apply
- Credit must be re-established with a minimum 620 credit score
2011 Conventional Waiting Guidelines (Fannie Mae):
- Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your bankruptcy has been discharged for FOUR (4) years.
- Foreclosure - You may apply for a Conventional, Fannie Mae loan SEVEN (7) years after the sale date of your foreclosure. Additional qualifying requirements may apply,
- Short Sale / Deed in Lieu of Foreclosure - UPDATED 12/16/11 Currently treated the same as a foreclosure with a waiting time of SEVEN (7) years before you can buy again using a Fannie Mae conventional home loan.
- TWO (2) Years up to Maximum 80% Loan to Value | 20% Down Payment
- FOUR (4) Years up to Maximum 90% Loan to Value | 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.
- SEVEN (7) Years above 90% Loan to Value | with less than 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.
- Credit must be re-established with a minimum 660 credit score.
- 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.
Preparing to Buy Again after BK, Short Sale or Foreclosure:
You should begin re-establishing your credit again immediately after a bankruptcy, foreclosure, or short sale and start really looking at your credit at least six (6) months before you are ready to buy again. Quite often there are things left over on your credit report that can delay your ability to qualify.
With a little head start, you can get your credit in line, qualify for financing and buy again in the lowest priced real estate market that we have seen in years!
Thanks to one of my favorite lenders, Kim Jones with Brand Mortgage, for putting this together. Kim is one of the best in the business!
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