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). 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.
See https://www.fanniemae.com/content/announcement/sel1005.pdf for the official guidelines
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.
Shane Milne | Lending in all 50 states | NMLS #81195... more