Home Buying in Marietta>Question Details

Soga60, Real Estate Pro in Atlanta, GA

Can I get an FHA loan approval after a short sale? How long do I have to wait after a short sale before I can buy a home? How bad is credit hit?

Asked by Soga60, Atlanta, GA Sun Sep 25, 2011

About a year ago, I reconciled with my child’s father, Ed and we became once again a family unit. While separated, I purchased a home while Ed stayed in our previous home which he solely owns. Since we are now a family again, we've decided to buy a home with much more outside living space because of the nature of his business. Unfortornuately, Ed cannot go on the loan due to his credit situation. I still have the obligation for the current home, but it is upside down and will not sell for the amount owed on the loan. I've never been late on payments for my current home nor any mortgage in the past and my credit is excellent. Are lenders taking into account mortgage payment history for someone that has completed a short sale and have no late payment history? How badly will a short sale affect my chances of purchasing another home right away? Are there any lenders who will take into account rental income and not require one or two years of rental history before using it as an offset?

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Answers

11
12 months after a Short sale you're now eligible for a new HUD program for an FHA loan.
2 votes Thank Flag Link Thu Oct 24, 2013
The standard waiting time after a short sale is 36 months before the borrower can obtain an FHA mortgage. Borrowers are not eligible for a new FHA loan if:
•They pursued a short sale on their principal residence simply to take advantage of declining market conditions, and purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.
Borrowers will be eligible for a new FHA loan on a short sale, if:
•The borrowers were current on the mortgage and other installment debts at the time of the short sale, and
•The proceeds of the short sale serve as payment in full.

Borrowers who were in default at the time of the previous short sale will not be eligible for a new FHA loan for 3 years (based on the date of the pre-foreclosure sale).

Very often, the lender will require that the owner be at least 30 days late on the mortgage prior to the completion of the short sale. This late payment policy does vary from lender to lender.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Conventional | FHA | FHA 203K Renovation (Streamline & Consultant) | HomePath® |
HomePath® Renovation | VA | USDA | GA Dream | Jumbo Financing
Web Reference: http://www.rodneymason.com
2 votes Thank Flag Link Sun Sep 25, 2011
First of all, it sounds to me like the home you're comfortable living in the that you own, meaning you're able to make the payments and you've never been late. In order to even qualify to do a short sale you must be able to prove that you have a financial hardship. It doesn't sound like you do. The bank won't forgive a loss and qualify you to do a short sale so you and your family can move up to something more comfortable. If I'm missing something, and you do have a qualifying hardship, most banks require a minimum of 4 years of clean credit reporting with no dings, i.e late payments, collections etc. before you're able to qualify. This requirement is in addition to you being able to bring your credit score back up after the short sale reporting on your credit report and dropping your score. Your scores will need to be back up to around 640. I would suggest renting if at all possible.
1 vote Thank Flag Link Sun Sep 25, 2011
For your rental income question, the industry standard is that you must have at least 25-30% equity in your property to be able to use rental income to offset the mortgage payment. This is an agengy rule, so all lenders must follow it for all FHA and conventional mortgages. Once there is at least 1 year of filed Federal tax returns showing the property as a rental, then you can use the rental income without having to meet the equity requirement.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Conventional | FHA | FHA 203K Renovation (Streamline & Consultant) | HomePath® |
HomePath® Renovation | VA | USDA | GA Dream | Jumbo Financing
Web Reference: http://www.rodneymason.com
1 vote Thank Flag Link Sun Sep 25, 2011
FHA Back To Work Program waives Foreclosure, Bankruptcy, And Short Sale waiting periods. Visit http://www.whywaitbuytoday.com and see if you qualify for a refinance today.



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CFS Mortgage
http://www.whywaitbuytoday.com
0 votes Thank Flag Link Sun Dec 1, 2013
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0 votes Thank Flag Link Thu Nov 21, 2013
The usual waiting period is 2-3 years after short sale you can qualify for a loan. However, some lenders have flexible terms. You may qualify for a loan sooner than that. Visit http://www.whywaitbuytoday.com for more details.





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Dana Lindberg
CFS Mortgage - http://www.cfs203k.com
0 votes Thank Flag Link Sat Oct 26, 2013
I had a short sale last year and my Realtor recommend http://www.cfs-mortgage.com/flex for a home loan. I am very happy to be able to purchase again.
CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
0 votes Thank Flag Link Sun Jun 2, 2013
Short sale is not a way to remedy changed circumstances of choice.
0 votes Thank Flag Link Mon Sep 26, 2011
There are too many variable to know for sure, it depends how they reported the short sale on your credit. the best thing you can do is to meet with a local and trusted mortgage broker, they can prequailify you at no cost, they will look at your credit plus your financials and let you know if there are any mortgages that you may quailify for given your specific situation.

http://www.trulia.com/blog/scott_godzyk/2011/08/how_do_i_kno…

Please see my blog for tips on getting a mortgage
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sun Sep 25, 2011
There is not a atraight answer I can provide without knowing more of the details, but you can generally get an FHA loan in 2, maybe 3 years following a short sale. Your credit after 2 years is not as important as your current payment history and your ability to pay. A short sale should show on our credit as "lender accepted less than owed" or similar language. It will not show as a "default".

Please check out my blog at http://www.MariettaShortSaleRealtor.com which may have answers to many of your questions and concerns.

I can also provide a confidential consultation and review your situation on a more in depth level.

Simply give me a call at 770 579-4060

Lynn Horner Baker
Horner Baker Partners

GA Auction License AU003685
Cobb Association of Realtors #5 Team 2010
0 votes Thank Flag Link Sun Sep 25, 2011
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