Home Buying in Schaumburg>Question Details

Confused, Other/Just Looking in Elk Grove Village, IL

How long after a short sale can I purchase (qualify) for FHA loan?

Asked by Confused, Elk Grove Village, IL Thu Dec 29, 2011

My short sale was finally completed in March of 2010 however the lender forced me to go behind in payments to begin the process. Then the loan got sold twice and I was ignored, lost the buyer and finally got a new buyer and closed after 9 missed payments.

The property was a condo in Schaumburg that was only worth half of what I paid, major structural issues, defunct association, and large increase in crime. I had several issues from the move in inspection that were never fixed by the developer and they went BK and foreclosed - so nothing got fixed and the issues continued to spiral. Nothing else sells there today w/o a short sale/foreclosure or cash only sale as the HOA has a 40% delinquency rate on dues. Interesting enough, my old unit's market value is 15K less than the purchase price of the guy who bought my short sale. All total it is worth about $85-90K less than when I bought it.

When I did the short sale, my attorney said 18 months - 2 years to repurchase with FHA.

Help the community by answering this question:


Hi, your attorney may or may not be right, you really need to consult with a good loan officer, one who has been
dealing with clients that have short sold properties and FHA loans... The agent below offers to forward several reputable lenders to you, if you do not have one you trust and who has the experience described above.

Good Luck to you...
Edith YourRealtor4Life and Chicago and North Shore Expert
Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
2 votes Thank Flag Link Thu Dec 29, 2011
It's understandable that everyone is confused on these issues because the "rules" keep changing. In the beginning of this mess, it was about 2 years to qualify. Then when things got so much worse the "rules" changed to 3 years for short sales and foreclosures.

Your best bet is to talk to a reputable lender and have them pull your credit and work with underwriting parameters. If your scores are anywhere near 700, you just might qualify. I have a few really good lenders you could check with if you don't have one already. Let me know if you need a referral.

I wish you all the best because it sounds like you truly got stuck in a bad situation and did your best to resolve issues without causing financial damage to yourself or the lender. It's too bad that the lenders are taking so long to really work out problems and help people. The market continues to change and there are no set rules for anyone to follow but I do see some improvements, especially in short sales.

Janet Baier
RE/MAX Destiny
2 votes Thank Flag Link Thu Dec 29, 2011
I have sold several homes this year to clients who did short sales in the past, the wait on average with FHA is 2 years, check with your lender however becasue you want to make sure your credit is in good shape besides the short sale. Need a lender? I would be happy to give you several excellent referrals.
2 votes Thank Flag Link Thu Dec 29, 2011
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.
0 votes Thank Flag Link Wed May 8, 2013
The general rule of thumb right now is 3 years. There are some lenders that are still afraid to lend to you after that time. The mortgage business keeps changing and each situation needs to be looked at separately. You should shop around lenders to inquire because your case may qualify you at any time but in general it is still at least 3 years.

Work with a good agent (all agents who represent you represent ONLY YOU unless you sign an agreement saying that the listing agent for the property you're interested in is also going to represent you as the buyer for that same property: AKA DUAL AGENCY). That agent will refer you to a great lender who will guide you through the process. If the time isn't right just yet, they'll work with you to get you where you need to be.

I'm glad to help in any way I can.
0 votes Thank Flag Link Sun Oct 28, 2012
The chart in the attached link may help answer your questions - shows with different types of loans how long before you will qualify.
0 votes Thank Flag Link Sun Oct 28, 2012
You'll want to check with a good FHA lender when you get around the 3 year window. If you want to bounce things off them earlier - say after the two year point - that is fine.... I'd be happy to refer an amazing FHA lender to you.

When you buy - you should consider using an Exclusive Buyer Brokerage (there are just a few in the Chicago area, and my company is one of them) - because they are 100% on your side, negotiation experts, and never represent sellers - so can never be half on the seller's side - as a traditional buyer agent can be (if they show one of their own listings for example.)

Feel free to visit the Buyer Broker Chicagoland web site for more information.
0 votes Thank Flag Link Thu Jan 19, 2012
It is 3 years after a short sale for FHA, unless you were never behind in the payments (which almost never happens). Conventional loans in most cases require 4 years. Use this time to improve your credit and put yourself in a better buying position and you will be in better shape in the long run.
0 votes Thank Flag Link Fri Dec 30, 2011

Conventional loans will require a 2-year minimum, but that assumes that you make a 20% down payment on the new purchase. FHA loans will require a 3-year wait. However, you should work with a lender who can run your credit as you near these timelines and see if there are other aspects of your history that must be addressed as well.

I created a short video that covers your question as it gets asked so frequently.

Rob Spinosa
0 votes Thank Flag Link Thu Dec 29, 2011
Thanks for the information. I will give one of the mentioned lenders a call to see what the possibilities are for my situation. I had a fannie mae conventional loan, and the guidance on the web is all over the place. Either way, if I can or can not buy in the next year I'd like to be able to start planning now.

My whole short sale process was a hot mess - I was on the MLS for 12 months prior to giving in to the short sale, then the late payments and then got tossed around by my original lender and the two subsequent lenders. You'd shake your head at the things that happened during showings (building and area was a hot mess too) and the run around with the 2nd developer and defunct HOA. Ironically, the short sale closed 2 years to the date I first listed on the MLS. Hopefully this process has changed a bit, but it doesn't really do much for those of us that were affected by the unorganized mess it has been. My goal is to find a permanent single family home at some point in the future and move on from this unfortunate series of events.
0 votes Thank Flag Link Thu Dec 29, 2011
Just pay the loss amount to the bank and you should be good to go.
0 votes Thank Flag Link Thu Dec 29, 2011
The best thing to do is talk to a loan officer. I have one I can send you to if you email me your contact info.
0 votes Thank Flag Link Thu Dec 29, 2011
An FHA expert you could ask is Evan at 847-517-1700 or Guy at 847-542-6264 or Dominic at 847-9778111
0 votes Thank Flag Link Thu Dec 29, 2011
If you pay the loss to the lender I would think your time to repurchase would be when you want to buy again.
0 votes Thank Flag Link Thu Dec 29, 2011
I know lots of changes have taken place, so I wonder if it is now 3 years? What would be an extenuating circumstance?

My credit score never really went below 700 throughout the ordeal but was near 800 at the start. I have purchased a car since and refinanced and consolidated debts to pay off since then as well. My credit score is still in the 730-750 range and my income is very good.

I'm just looking to see what options I may have and when, so I can focus my financial planner better and possibly buy a house at some point in the future.
0 votes Thank Flag Link Thu Dec 29, 2011
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