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
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?
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.
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
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.
Arizona Homes and Land
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
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
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
Good luck, Angie
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
Primary Residential Mortgage
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
Laura Myers PLLC
AZ Real Estate Consultants