Joshua Lerette - Sr. Loan Officer
Residential Finance Corp.
After the short sale, most lenders won't lend to you for a 2 or 3 year waiting period, as a short sale is a negative event in the eyes of a new mortgage lender. However if your payments are all on time for the 12 months leading up to the short sale, including being current when your home is sold, then an FHA mortgage will allow you to qualify for a purchase 1 day after the short sale (i.e. no waiting period) as long as you aren't buying a similar or superior home in the same commuting area for a lesser price. So if you were going to downgrade to a smaller home, that would be permissible.
Not all FHA lenders will permit that though, each one can have different guidelines. And so if doing a short sale and buying with FHA financing afterwards is your plan, I would make sure you have been pre-approved to purchase a new home based on those FHA-buying-after-short-sale guidelines as part of your preparations. Mortgage guidelines also can change without much notice, so to be safe you should also make a Plan B in case you have to rent for awhile before you could buy again. Also keep in mind that a short sale can damage your credit score after it is reported to your credit report - I have seen anywhere from just a few points lost (like when someone never misses a mortgage payment) to a couple hundred points lost (when there are lots of late payments leading up to the short sale). So planning on doing a short sale and purchasing afterwards definitely has some risks.
Shane Milne | Lending in all 50 states | NMLS #81195