FHA states, just recently, that if that short sale is due to a significant loss (20% or more) in income and can be documented, you are able to qualify for a new home loan without the waiting period. You must, of course, demonstrate that your credit was clean prior to the short sale and that it has continued to stay clean once the house was sold.
We are a direct VA lender and we have no waiting period after a short sale if you were fortunate enough to sell and not go delinquent on your mortgage at time of sale.
Feel free to look me up for more information.
James, at least you won't have to worry about home prices going up anytime in most areas. You have plenty of time to look, and you may even be able to take advantage of someone else's short sale when the time comes. Just try to stay on a month-to-month lease so you have more flexibility.
Borrowers must apply to have their VA loan eligibility restored by filing a copy of VA Form 26-1880 to the Winston-Salem Eligibility Center.
One thing could prevent a buyer from getting eligibility restored right away. If the VA paid a compromise claim as part of a short sale, the borrower may be indebted to the government as a result of that claim. The Department of Veterans Affairs may not restore eligibility if the applicant still owes money to the government.
Here is the specific wording:
â€œâ€¦although the veteranâ€™s debt was waived by VA, the Government still suffered a loss on the loan. The law does not permit the used portion of the veteranâ€™s eligibility to be restored until the loss has been repaid in full.â€
If a VA loan applicant is notified that a debt to the government exists, or was aware of the debt prior to applying for the loan, the applicant should contact the VA directly to work out the details of repayment before applying for a new VA mortgage.
A borrower may still be able to take advantage of any unused VA loan eligibility. Any remaining entitlement may be allowed if a borrower did not use the full entitlement on the previous VA mortgage.
A borrowerâ€™s debt for a compromise claim may be factored into the debt-to-income ratio, unless the lender feels the compromise claim debt is too great compared to other financial factors. That debt may result in the need for a down payment, or a larger down payment than usual â€“ requirements will vary from lender to lender.
FYI: I understand there are loans out there today that will allow a homeowner to concurrently sell their current home short and buy another at the same time. Again, certain criteria applies and you should contact Bill above for your particular situation.
P.S. If for some reason you don't qualify today, Bill will be able to get your credit to a point to allow you to save money when you do qualify in the near future.