Home Buying in 94505>Question Details

Elizabeth And…, Home Buyer in Discovery Bay, CA

How long after a short sale do you have to wait to buy a home? High credit score , pre approved, 15 thousand down, 2 good jobs?

Asked by Elizabeth And Luis Claudio, Discovery Bay, CA Wed Nov 16, 2011

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Elizabeth,

There is a ton of false and incorrect information flying around out there about this topic. In fact I'm seeing some incorrect direction on this forum. Fannie Mae sets the lending "standards" that most lenders follow. However, not ALL lenders follow the Fannie Mae guidelines. Fannie Mae rules stipulate that you must wait 3 years after a short sale unless you have "special circumstance" that caused the short sale. The only three special circumstances that I have seen so far are 1. Death in the immediate household 2. Forced work relocation of more than 100 miles 3. Military deployment. If you can prove one of the circumstances then you might qualify in as little as 2 years.

Here's where it gets cloudy. As mentioned, not all lenders follow Fannie Mae. For instance, there is a local lender here in Contra Costa County that will qualify you for a new mortgage THE DAY AFTER YOU SHORT SELL under certain circumstances. There are very few lenders who deviate from Fannie Mae because if they do then they will not be able to sell the loan. So it must be a portfolio lender. There are not very many but they do exist. I am not a loan agent. I am a realtor. But I can put you in touch with a loan agent IN Pleasant Hill who can set you up with what you need. Call or email me anytime and I'll put you in touch with him.
2 votes Thank Flag Link Wed Nov 16, 2011
That depends on the type of loan you use to purchase the next home, I have linked Fannie’s stance on this, FHA is a little more liberal.

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/se…

Info on Lease Options:
http://www.trulia.com/blog/jimsimms/2011/11/rent_option_or_r…

Info on the criminal side of Credit Repair:
http://www.trulia.com/blog/jimsimms/2011/10/credit_repair_ca…

Info on Down Payment Assistance in Kentucky:
http://www.trulia.com/blog/jimsimms/2011/03/down_payment_ass…
1 vote Thank Flag Link Wed Nov 16, 2011
It can be confusing and deflating to consumers who have to wait 2-7 years after the unfortunate incident of a Foreclosure or Short sale or Deed in Lieu. Most of these consumers are now renting from a landlord or are living with family or friends to have a roof over their head. However there is a solution to help these consumers get back the Pride of Homeownership and Not have to wait years to buy their home again. Feel free to contact me so I can share the right path to your new home goals.
0 votes Thank Flag Link Wed May 21, 2014
With our exclusive portfolio program there is no waiting period. There's a couple simple requirements however. You must have 20% down and a 660 mid FICO score. We have loan amounts up to $4 Million on this product.

Click my website below to contact me for more info.

Good Luck!

Craig Bosse
Web Reference: http://www.craigbosse.com
0 votes Thank Flag Link Wed Feb 12, 2014
I know this is an old thread, but this question comes up all the time so I thought I would address it again. For your area, the waiting period is 1 year. Please click on the link below and read my article.

Best of Luck!

http://www.trulia.com/blog/george_raymondo/2011/04/can_i_buy…
Web Reference: http://www.AFN-Loans.com
0 votes Thank Flag Link Sat May 18, 2013
UPDATE: The guidelines are essentially the same (see my answer below) for Fannie Mae, Freddie Mac, VA and any other "federally related" loan. However, for privately financed conventional loans it is possible to get approval TWO YEARS after a short sale if you meet that banks requirements and have 20% down.

It is also possible to get a mortgage loan the day after a short sale in some cases if you were never late on your previous mortgage payments. This however is somewhat rare as most banks required that you be late on payments to illustrate hardship.

It's a complicated world when it comes to mortgage loans and buying real estate. And it changes constantly. Feel free to contact me anytime for the latest scoop. Info is always free and I am not a salesman.
0 votes Thank Flag Link Tue May 14, 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.
0 votes Thank Flag Link Tue May 14, 2013
You don't have to wait forever after short sale. You can buy a new home in less than 2 years. I did!

My Realtor turned me on the the Flexible Credit Loan, http://www.cfsflex.com. It seemed too good to be true, but I got approved and now have a pending offer, even after my short sale less than two years ago. Big banks said it could not be done.

Obviously it can.
0 votes Thank Flag Link Sun Mar 24, 2013
A lender is clearly you best source for determining how long you have to wait to buy a home after a short sale. That time may be now, with only 2 years on with a conventional loan. You may want to buy a home on the Central Coast of California in the San Luis Obispo Area, as prices and interest are historically low.

Give me a call at 805-471-0828 or email me at David@Dnorwood.com and I will be happy to send you home listings based on you criteria. Or, you can go to my web site at http://www.dnorwood.com/SLO.aspx to view homes in real time.

David Norwood - Central Coast Real Estate
Web Reference: http://dnorwood.com
0 votes Thank Flag Link Thu Mar 14, 2013
Masoud, yes the short sale seasoning requirements are the same whether it was a primary residence or non-owner occupied property.

Shane Milne | NMLS #81195 | Lending in all 50 states
0 votes Thank Flag Link Wed May 16, 2012
What if you short sold an investment property? Does Same rules apply?
0 votes Thank Flag Link Tue May 15, 2012
I wanted to give some very specific answers to this question as I've seen many answers here. These are directly from the handbooks and seller guides for each program.


FHA- 3 years. Circumstances allow less than 3 years if the homeowner wasn't late during the shortsale or circumstances were outside the homeowners control.
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/fi…


Conventional- 2 years with 20% down, 4 years with 10% down or 7 years with no restrictions This is on page 451 of the Fannie Mae seller guide- https://www.efanniemae.com/sf/guides/ssg/sg/pdf/sel022812.pdf

VA- 2 years as the VA states they treat foreclosures the same as bankruptcies for seasoning. Short sales aren't bankruptcies but since the VA reviews mortgage history in the last 2-years very closely, I don't see them releasing updated guidelines other than adding verbiage stating short sales are included.
Chapter 4 of the VA handbook
http://www.benefits.va.gov/warms/pam26_7.asp


USDA- 3 years unless USDA's underwriting engine (GUS) approves you sooner. Typically 2-years with re-established credit. The USDA handbook has specific guidelines for debt that is paid off for less than what is owed, which a defaulted short sale falls under. I've found that GUS typically approves a client after 2-years of re-established credit but sometimes sooner.
Chapter 4 of the rural housing handbook
http://www.rurdev.usda.gov/SupportDocuments/3550-1chapter04.pdf


On government loans, especially VA and FHA loans, it's very important that the buyer does not have any derogatory credit items following a major event like a short sale.
0 votes Thank Flag Link Tue May 1, 2012
I agree with Shane Milne, that is my understanding as well, I would add that the extenuating circumstances he spoke of for a conventional loan is NOT the same as a hardship would be to allow the short sale. They would generally include death or illness of an immediate family member, involuntary job transfer, and military deployment.
0 votes Thank Flag Link Sat Apr 28, 2012
E&L, the time it takes to qualify after a short sale depends on what type of loan program you are applying for. I'll go over that in a second... however you said you are "pre-approved", so I am confused on why you are asking this question if you are pre-approved, because if you are pre-approved, then you should have met the time seasoning requirements for having a short sale in the past. Are you skeptical of the lender who has pre-approved you and you are looking for re-assurance?

If you are qualifying for an conforming mortgage, which most people refer to as a conventional mortgage, then you'll need to wait anywhere from 2 to 7 years depends on how much of a down payment you have. Conforming loan programs are loans made under Fannie Mae & Freddie Mac guidelines - which are a type of conventional mortgage (the most popular & common type of conventional mortgage). Jim put the link to those guidelines - as you can see if you have 20% down then it's just a 2-year wait, 10% down a 4-year wait, and with less than that (as little as 3% down) it's a 7 year wait. If there are extenuating circumstances, then at the 2-year mark it's just a 10% down requirement.

FHA financing has a 3-year waiting requirement, however less than 3 years (as little as 1 day) is permissible if you weren't in default on your mortgage on the time of short sale, weren't late on the mortgage or other installment debt (car loan, student loans, personal loans) for the 12 months prior to the short sale, and aren't taking advantage of declining market conditions by buying a similar or superior home in the same commuting area. Exceptions to being in default can be made (but rarely are) if there are extenuating circumstances surrounding the short sale. FHA financing can be done with just 3.5% down, no matter if someone has ever had a short sale or not.

VA & USDA financing have no published short sale guidelines, but most lenders apply FHA's guidelines except they permit VA financing after only 2 years, not 3 years, in the case of a defaulted mortgage at the time of the short sale.
0 votes Thank Flag Link Thu Nov 17, 2011
Count on around 2 years or less....depending on how aggressive you are in repairing your credit by paying down debt, paying on time, not incurring new debts (or opening credit cards and other loans).

Spend this time building up your assets. $15K down may not be significant enough. Do you also have funds for closing costs as well?
0 votes Thank Flag Link Wed Nov 16, 2011
Since you state that you are pre-approved--if that's the case, you can purchase whenever you're ready; generally it can take two to the three years...
0 votes Thank Flag Link Wed Nov 16, 2011
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