Emily, that is not the guideline. If you are going to quote guidelines, please do so correctly. I happen to do a lot of these mortgages and I would appreciate it if you didn't turn away people who actually qualify because you are uninformed.
From HUD: 4155.1 4.C.2.l
Borrower Current at the time of Short Sale
A borrower is considered eligible for a new FHA-insured mortgage if, from
the date of loan application for the new mortgage, all
â€¢ mortgage payments on the prior mortgage were made within the month due
for the 12-month period preceding the short sale, and
â€¢ installment t debt payments for the same time period were also made within
the month due.
That does not mean there is a 12 month waiting period, it means all payments on all accounts must have been made for the 12 months preceding the date of application. They can qualify the day after the short sale.
If you did miss payments, there are investors out there who still may give you a loan & not rip you off on interest rates or points charged. Likely you will need to wait just a little bit longer, another 9 mos., so you're at the 2yr mark.
If you would like me to refer you to a lender to look at your case, shoot me an email directly if you want to talk about this some more, I don't look back on this same Trulia thread for answers posted after mine.
Realtor Since 1996
Main Street Realtors
Short Sale Expert
You can see the qualifications on my blog. http://www.trulia.com/blog/gvd/2011/05/purchase_after_short_
If you meet the guidelines I can get it funded for you.