Home Buying in 60435>Question Details

Marie, Renter in Joliet, IL

I would like to know when can I purchase a home after short sale? It will be 3 yrs June 2014. Can I qualify for conventional or FHA? USDA?

Asked by Marie, Joliet, IL Wed Oct 30, 2013

Did the guidelines change? I have read so much conflicting information! How much money do you have to put down?

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Hi Marie,

If your short sale was due to a loss of income 20% or more, for 6 months before the short sale and now have re-established credit for 12 months you may be able to qualify for an FHA mortgage. If not, you will have to wait until June. Contact me if you have any questions or if you believe you may be able to qualify under these circumstances.


Thank you,

Ashley Pimentel
Senior Loan Originator
Market Place Mortgage
246 E Janata Blvd. Suite 220
Lombard, IL 60148
Cell: (630) 217-7013
apimentel@marketplacemc.com
0 votes Thank Flag Link Thu Oct 31, 2013
Guidelines are constantly changing, and they are highly dependent on the circumstances leading up to the short sale and what you have done to "right the ship" in the time since.

For conventional financing, it is highly dependent on your down payment. If you have 20% to put down, you could get a loan as soon as 2 yrs after the short sale. You can qualify after 4 years if you have 10%. And if you can only put down 5% then you will have to wait 7 years. That is direct from Fannie Mae's underwriting guidelines, although like Suzanne said some lenders impose stricter guidelines.

FHA has in fact relaxed their guidelines for certain circumstances. If you suffered an income loss of 20% or more and that is what caused the short sale then in certain cases the wait could only be a year. This is called the "BAck to Work" policy.If another reason led to the short sale, then the general waiting period is 3 yrs. But FHA's guidelines also state that a borrower is not eligible for a new FHA-insured mortgage if he/she pursued a short sale on his/her principal residence simply to:

- take advantage of declining market conditions, and
- purchase a similar or superior property within a reasonable commuting
distance at a reduced price as compared to current market value.

USDA generally follows FHA guidelines, with the exception of the back to work exception.

This is about as detailed as I can be without knowing the full circumstances, and those requirements come directly from the respective underwriting guides. I've helped many people in your same situation, so please feel free to give me a call or email me if you would like to discuss things further.



Tony

Tony Grech | Mortgage Loan Originator | NMLS #977416
PMAC Lending Services, Inc.
Toll-free (855) 642-4762 ext. 278
Mobile (313) 622-7383
Fax (248) 945-4842

tony.grech@pmac.com
0 votes Thank Flag Link Wed Oct 30, 2013
Most of the reason for the conflicting information is because FHA can change the guidelines, but often lenders have overlays (their own rules) which will keep them from implementing these guidelines.

FHA can be done prior to the 2-3 years they did require. Can be as early as 1 year after short sale, provided the person can qualify for the loan on credit, income, etc. But also, they must demonstrate that the reason that they had the short sale has been reversed. So, if there was an income shortage, loss, etc. That must be fixed in order to qualify prior to the 3 years.

However, not all lenders will do this. So you need to find the right one. I have several loan officers I can refer you to. Please feel free to contact me and I can provide to you.

Suzanne Hamilton
Managing Broker/Owner
RE Homes Source
888-788-9544
suzanne@remarketingconsultants.com
0 votes Thank Flag Link Wed Oct 30, 2013
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