Financing in Maplewood>Question Details

Barbara, Both Buyer and Seller in Maplewood, NJ

FHA mortgage after short sale - what does eligible mean to lenders?

Asked by Barbara, Maplewood, NJ Wed Dec 19, 2012

FHA guidelines say someone who has had a short sale (with late payments) is "not eligible for a mortgage" for 3 years from the date of the short sale. What does "eligible" mean - is the 3 years referring to the date someone can "apply" for a mortgage or "close" on a mortgage? I am approaching the 3 year mark and hear different things from different lenders. I would like to apply now and be able to enter into a contract with a close date after the 3 year date.

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“Eligible” is all encompassing, any issue can mean you are not eligible. Specifically on obtaining an FHA mortgage FHA determines if you are eligible for their Mortgage Insurance. The period you are referring to is not as clear cut as most loan officers believe it is, or as the guidelines imply for that matter. If the short sale was on an FHA loan and now you are trying to get another FHA loan, the time line is not from the date of the sale of the property. The timeline starts on the date that FHA paid the claim, not when the sale went down. In the real world that could be a long time from when the lender took it on the chin. The previous lender may not have filed the claim right away, FHA may not have paid it right away, etc.

In an FHA to FHA timeline you are not eligible until FHA says you are. The lender requests a CAIVRS Authorization, and unless they receive an Authorization Number they will not be able to insure the mortgage. Good luck,

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
Web Reference:
0 votes Thank Flag Link Thu Dec 20, 2012
Hi Barbara. As you mentioned, FHA does allow you to become eligible (considering that all other determining factors check out) for an FHA loan 3 years after a short sale. At the 3 year mark, you can apply for the loan, though I suggest you meet with a Loan Officer a little before. You want the Loan Officer to review your credit report along with all other documentation (income docs, assets, etc.) so that you can make sure that short sale asside, everything else is in order. If your credit, income, assets and everything else that goes into determining if you'd approve for an FHA loan, all translate in you qualifying for an FHA mortgage, this is ultimately what "ELIGIBLE" means.

If you need a Loan Officer to help you, I'm always available. I would say about 70% of loans I originate and close are FHA loans. I'm sure my experience can be helpful. Good luck!

Javier Meneses
Senior Loan Officer
NMLS #23130
310 Crossways Park Drive
Woodbury, NY 11797
(516) 740-4478
3 votes Thank Flag Link Sun Feb 24, 2013
There is a site that will help you determine if you can qualify for a refinance after short sale, foreclosure, or filing bankruptcy. Check out
0 votes Thank Flag Link Sat Aug 17, 2013
I had a short sale last year and my Realtor recommend for a home loan. I a very happy to be able to purchase again.
0 votes Thank Flag Link Mon May 6, 2013
Barbara, The best thing for you to do is to apply for a credit approval only from a lender who will give you an approval subject to your short sale 3 year anniversary date. This was you will have the best of both worlds. You can shop for a home and be confident that you will have an approval once ypu pass the three year mark.

I have been in the mortgage lending arena for 30 years and I can assist you with doing just that. Please feel free to call me if you so choose.

Camille Marotta
Branch Manager
0 votes Thank Flag Link Sun Feb 24, 2013
In my experience helping people purchase after short sale you will have to wait until the 37th month to get the approval for FHA financing. You should start working with a mortgage professional in your area when you get close to the 3 year anniversary so they can pre qualify you.
0 votes Thank Flag Link Thu Jan 17, 2013
FHA guidelines states that it must be 3 full years after the date of short sale to be eligible for FHA financing. You must also have evidence via cancelled checks a rental history and a savings pattern.

i would suggest that you meet with a loan officer that can prepare you properly so that you do not have any obstacles when you do apply.

If you would like, i would be happy to send you a list of items that will your transactionmove smoothly.

Camille Marotta, Branch Manager NMLS 9838
Residential Home Funding
0 votes Thank Flag Link Thu Dec 20, 2012
Your best bet would be to have a mortgage rep tell you the date you can apply for a mortgage after reviewing your credit. The credit score will also determine your eligibility along with other factors. If you need assistance with finding a good mortgage rep, just shoot me an email.
0 votes Thank Flag Link Wed Dec 19, 2012
It means apply, FHA always goes by the application date. To get your closing as close to the 3-year mark as possible, you can become pre-approved ahead of time though, and just re-apply at the time your offer is accepted. The loan officer can just retain all of the previously submitted your documents, and just start up a new application and re-check credit.

Shane Milne | Lending in all 50 states | NMLS #81195
0 votes Thank Flag Link Wed Dec 19, 2012
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