â€¢ VA requires 2 years from the foreclosure sale date/when the home is no longer legally in your name (only 1 year for extenuating circumstances)
â€¢ Fannie Mae & Freddie Mac require 7 years from the foreclosure sale date/when the home is no longer legally in your name (4 years if it was due to extenuating circumstances)
In all situations you need at least 12 months of re-established credit and 3 traditional trade lines, some lenders want 3 trade lines of 12 months each. Other than medical collections that can be properly explained, if there are any late payments or delinquent accounts (collections, charge-offs, judgments, tax liens) after the foreclosure then the time seasoning often starts over again from the latest late payment/delinquent mark (underwriter's discretion).
Having a verifiable on time housing payment history goes a long way to making an underwriter feel comfortable, as well as taking a pre-purchase housing counseling class with a budgeting/financial module. Practically anything you can do to prove that you have made & kept a vow to make all payments on time will be helpful.
You can get home loans from various sources. For example, if you have a family member or a friend who has money in a CD earning 1%, you might be able to have them put the money up for your home loan and then you pay them 5% or 6%. It is a better return for them as well as helpful to you.
You might be able to find a home you like where the seller will carry financing for you. You would give them a down payment and then make monthly payments to them.
You might be able to do a lease option
You might be able to do a rent to own
There is typically a wait period after a foreclosure and depending on which type of mortgage product you choose, or get sold will determine how long that wait period is.
Obviously, the correct thing to do would be to work towards homeowner ship. This would start with improving your credit rating, get a large down payment saved up, make sure your tax returns are in good standing, then apply for a mortgage product to find a good quality product that suits your needs, and then locate a suitable home. This of course is boring and takes hard work and planning, something so few are willing to do these days.
I hope this helps! Good luck
Hannah Fliegel, FICO Pro
More and more often the lenders are looking at each deal on a case by case basis. If your credit history is otherwise excellent, and you have a compelling story as to what caused your foreclosure you probably have a good chance to get another mortgage after a year or so.
Contact your mortgage professional for further info and advice.