Home Buying in Scottsdale>Question Details

Richard Chap…, Home Buyer in Scottsdale, AZ

Looking to purchase a new home. A couple of years ago had a short sale. Anyone know the approximate wait time before creditors will look at me?

Asked by Richard Chapman, Scottsdale, AZ Tue Jul 19, 2011

I have heard different answers. I have heard two year waiting time and then three year waiting time if you had any late payments. Is there a correct answer for all of this mess?

Help the community by answering this question:


If you were on time with the payments for the 12 months prior to the short sale (same with your installment debts), and you would not be buying a similar or superior home in the same commuting area at the same or a reduced sales price, then you can purchase 1 day after a short sale with either FHA or VA financing.

If you were late on the mortgage or installment debts within 12 months of the short sale, or if you were looking to "buy up" but at a lower price than you purchased your home for,and it's in the same area, then you'll be required to wait 3 years for FHA & 2 years for VA (most lenders go by 2-years, some will permit it shorter, even 1 day, VA doesn't have printed guidelines on short sales). If that was your situation, and there was extenuating circumstances, then those circumstances can be considered for a shorter period of time.

With conventional conforming financing you'd have to wait 2 years after the short sale, then you could purchase with 20% down, or 4 years with 10% down, or after 7 years there is no restriction on how much you need to put down (so technically you could put 3% if that was your situation today). With extenuating circumstances that timeline can be shortened down to just 2 years for 10% down.

FHA short sale guidelines: http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?addr…

Fannie Mae short sale guidelines: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/se…

Freddie Mac's are more restrictive, and are buried deep at the AllRegs® link at http://www.freddiemac.com/singlefamily/ (it's a Javascript link, requires Internet Explorer) in Chapter 37.7: Evaluating Borrower credit reputation

Fannie Mae & Freddie Mac = conforming loan programs = the most coveted since they usually have the most attractive terms = majority of conventional mortgages being made today.

Do all lenders that offer FHA, VA, Fannie & Freddie mortgages go by those guidelines? No. Some add "overlay" (more restrictive) guidelines. But a lot do, more than people think.

Those aren't the only loan programs, there are other conventional loan programs that are non-conforming, but most of those programs are tougher on credit than the aforementioned.

What was your situation with the short sale?
3 votes Thank Flag Link Tue Jul 19, 2011
Hey Rich,

Your answer depends on a couple of different things. What type of loan did you have? Typically, it will take about two years to recover. However, all lenders are different in their ability to qualify buyers. Assuming you are having trouble, I have a lender who works under less stringent guidelines and will be able to help you. I worked as a negotiator on a top short sale team in the southwest, I encourage you to visit my website for more information. I have videos on every page with answers to just these kind of questions.

0 votes Thank Flag Link Thu Jul 21, 2011
The best thing to do is to talk to a lender. They will do a full check on your situation and let you know when you can qualify and for how much. If you need a referral, contact me and I will give you a couple to talk to. Good luck!
0 votes Thank Flag Link Tue Jul 19, 2011

Guidelines do exist for FHA Loans as well as conventional loans. The guidelines do have some latitude for lenders to interpret the guidelines.

Your individual file can be and should be reviewed carefully to see if it's possible to find an avenue that works for you.

It is possible to find the best route to get you in a home sooner than later.

Arizona Homes for Sale by a Guy from Iowa
Web Reference: http://Www.McVinua.com
0 votes Thank Flag Link Tue Jul 19, 2011
Dear Richard:

It is not like there is a Federal Law that dictates when an individual lender will grant you a mortgage. Each lender decides based on all of your personal credit critera if you are now a sound credit risks. Most converntional lender bundle their mortgages up and sell them to instituional investors that have specific criteria for the quality of the loans than they buy. Other banks may keep the loans in house and have different criteria.

The advice of about two years if you keep your other bills current is about right on average.

There will always be someone that may go sooner. You just need to shop around. Don't forget seller may carry mortgages, co-signers, family members and lease to own as alternatives that your Realtor can find for you.

Good luck.

Jeff Masich
HomeSmart Realty
Arizona Homes and Land
Web Reference: http://ArizonaHomesLand.com
0 votes Thank Flag Link Tue Jul 19, 2011
Everyone has answered the question. I will only add that an option is available if you wish to buy a house sooner and that is Seller Financing, or an agreement for sale if there are any loans on the property. The latter is technical and the existing loans need to be thoroughly scrutinized.


Tooraj Bakhtiari
0 votes Thank Flag Link Tue Jul 19, 2011
Hi Richchap67:

To answer your question: "No, there is no correct answer for all this mess". As with many situations in today's real estate/financing market, it all depends on your particular situation. As the previous answers have shown, it depends on if you are going to be doing a VA, FHA or Conventional loan. It depends on whether you were late before you short sold. It depends on if you had "extenuating circumstances" as that term is defined by VA, FHA, FMNA or Freddie Mac. I have a matrix I created for these various scenarios and even it comes with a full page of explanations and caveats for the various "answers".

So, your best bet is to call an experienced loan originator, discuss your particular situation, and see what the correct answer is for YOU.

Bill Parker, Loan Officer
AZ Lic# 09011570
NMLS #223607
CPA--Licensed, no longer practicing

Legacy Group Lending, Inc.
15333 N. Pima Road, Suite 300
Scottsdale, AZ 85260
(O) 480-993-3080; (M) 602-565-3646; (F) 480-993-3081
EM: Bill.Parker@Legacyg.com
Website: http://www.LegacyG.com

MISSION STATEMENT: To create an unbelievably enjoyable experience for my clients, while guiding them through the most important financial transactions of their personal lives. My clients know me as their Mortgage Lender for Life. I truly appreciate your referrals.

If you think it's expensive to hire a professional to do the job, wait until you hire an amateur.
Red Adair, Oil well firefighter
0 votes Thank Flag Link Tue Jul 19, 2011
Calling your lender would be first as the rules change almost daily anymore, I believe it was 3 years but then again...once you have the correct answer from the right people it makes it easier to start looking for a new home..Our market is changing an the properties are getting picked over and purchased. The sooner you can take advantage of purchasing the better...I am happy to help, please give me a call or email..you can search easily and free via http://www.ayhomesmart.com if you like..
Good luck, Angie
0 votes Thank Flag Link Tue Jul 19, 2011
Hi Rich,

There are loan options available two years after a short sale. In fact, there are even some scenarios in which you can obtain financing just one year after a short sale. If you would like to discuss your situation in particular, please don't hesitate to call me at 602-694-5279 and I'd be happy to answer all of your questions. Have a great day!

Michael McDermott, NMLS 184065
W.J. Bradley Mortgage
Scottsdale, AZ
0 votes Thank Flag Link Tue Jul 19, 2011
Two years is standard for conventional financing with 20% down and re-established credit history. If your were able to successfully short sell your home with out going late then there is no waiting period for FHA. If you were late at the time of the sale then you would have to wait three years for FHA. Hope that helps.
0 votes Thank Flag Link Tue Jul 19, 2011
For an FHA loan, 3 years from the completion of the short sale. VA most likely 2 years. Conventional is 2 years with 20% down, 4 years with 10% down, 7 years for normal guidelines. Please call me to discuss your situation and get prequalified. Thanks

Jim Passamonte
Primary Residential Mortgage
0 votes Thank Flag Link Tue Jul 19, 2011
Hi Rich,

My wife Angie is a mortgage lender and we are doing mortgages for folks that I successfully helped them sell short and are now ready to buy back in to the real estate market.

Her company is telling her 2 years with good credit and substantial savings (20% down payment) for conventional financing.

Best to you!

Stew Keene - Professional Realtor
Web Reference: http://www.stewkeene.com
0 votes Thank Flag Link Tue Jul 19, 2011
Lenders qualification process has shown 2-3 years. Other factors will apply to you as well. A good lender to call is Brian Cardenas at 480-515-1491. He'll answer questions for you and let you know if you are ready or if not what still needs to be done.
Good Luck
Laura Myers PLLC
AZ Real Estate Consultants
0 votes Thank Flag Link Tue Jul 19, 2011
Two years seems to be the concensus:
If you are in position to buy again, I would contact a Lended or two and find out if you qualify.

Good luck and may God bless
0 votes Thank Flag Link Tue Jul 19, 2011
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