Financing in Portland>Question Details

Sharon Slaba…, Home Buyer in Portland, OR

Are there any lenders who will lend to buyers w/ good credit history, but who had a short sale w/in the last 6 months?

Asked by Sharon Slabaugh, Portland, OR Tue Aug 23, 2011

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Shane Milne’s answer
FHA is OK with just 1 day after a short sale, same with VA financing. You'll need to have made all of your mortgage payments & consumer debt payments on time for the 12 months prior to the short sale and you can also not be taking advantage of declining market conditions by buying a similar or superior home in the same area that you short sold your home. With conforming/conventional financing, you'll need to wait at least 2 years and then you'll be OK with a 20% down payment (4 years and just a 10% down payment). If there was extenuating circumstances surrounding the short sale, such as a medical situation with high expenses or if there was a significant reduction of income, then shorter time frames will apply.

What was your situation regarding the short sale? Were your mortgage payments and your other debt payments all made on time?
1 vote Thank Flag Link Tue Aug 23, 2011
jayhartt - not sure what your question is ... are you complaining about mortgage guidelines or are you asking how to qualify for a mortgage given your situation? Did you read the responses in relation to the original posters question?
0 votes Thank Flag Link Fri Jan 18, 2013
This is a good question. My husband and I had 30 years of great credit and home ownership until one of our kids got sick. Medical bills completely wiped us out and we had to short sale. Now we still have great jobs, great seniority, never are late with bills, and are paying more in rent than we would be with a house payment but can't be considered for a loan?
0 votes Thank Flag Link Fri Jan 18, 2013
There are no lenders until you are at least 2 to 3 years from the Short Sale date. 3 years with 0 to 3.5% down and 2 years with 20% down. However I do have an option for you. I work with an outstanding team of Realtors that put together either Lease Options or Contracts that allow you to get into an home right now. Then I will set you up with a plan to purchase or refinance your home within the time period of the lease or contract. You are welcome to call me Kim Wilson at 503.984.7390. Or call the Realtor directly, Jeremy Jordon 503.209.6183. We would love to help you!!!
0 votes Thank Flag Link Sat Aug 27, 2011
I would like to add my 2 cents regarding this topic, only Shane's answer is 100%. But I can add an additional option for you. If you were not late on your mortgage in the 12 month leading up to the close of your short sale, as Shane said you are good 2 go one day after close. But if you were delinquent on your mortgage at the time of close and you had NO extenuating circumstances there is still an option for you. We have a program that will allow a borrower purchase a home after a short sale with late payments as early as 12 months after an short sale (and it's not a Hard Money Loan). Please feel free to contact me if you have any questions. We are licensed in your State and I would be happy to refer you to a local Loan Officer.

Best of Luck!
Web Reference:
0 votes Thank Flag Link Tue Aug 23, 2011
HI George,

Does this lender work in CT? I have a short sale 1 year and 7 months out and ready to buy. Credit and income very good. Let me know. Thank You, Alex
Flag Mon Feb 11, 2013
I can second the value of a local lender, and recommend one - Kelly Parkman at NW Mortgage. They do their own underwriting. I just closed a sale for a very unusual client (not a short sale issue) and the value in the local professional can not be over stated. Kelly's at (503) 528-9800 or
0 votes Thank Flag Link Tue Aug 23, 2011
You may be able to get what they call a "hard money" loan. There are people that want to get more interest on their money then they are able to get in a bank or that type of thing. So, you might check with one of the agents you are working with to see if they have access to people that do that type of loan. I am not saying you can not get a regular loan from a lender but it would have to be a special circumstance and a lot of hoops to jump through. Wishing you the best and I hope you get what you need!
0 votes Thank Flag Link Tue Aug 23, 2011
obviously I was just giving an example, Justin, and not making any promises to Onesls. You will need to do your own investigation, Onelsl, and of course, it will depend totally on your situation. My point is, its possible in general for some situations to be approved in a shorter period of time than the standard "two years" answer.
good luck!
0 votes Thank Flag Link Tue Aug 23, 2011

That is definitely one of the more approvable extenuating circumstances that FHA will allow due to the fact that the home was awarded to the wife in the decree. Without knowing all of the circumstances we are just shooting general underwriting guidelines.
0 votes Thank Flag Link Tue Aug 23, 2011
I have one right now where the buyer has over 800 scores. His short sale was 1 year ago, and it was a situation where it was a divorce and he was on the deed, but she had the home in the decree and it was her decision to move. They were only 1 payment behind when the short sale closed.
With a letter of explanation of what happened, as well as the great credit, long-term employment, and a copy of the divorce decree, he just got underwriting approval.

I would recommend to take it to that level and actually get underwriting to approve your file before you waste your time or your team's time. But if you have a good reason that makes sense and can be backed up you might have a chance. He got approved with both FHA and Farm Home Loan.

I would look for a lender with local underwriting as they sometimes have more options that a cold, remote underwriting team. that would leave out most banks. The lender on my deal is great, and you could contact Ted Spradlin of Alpine Mortgage where my buyer is getting his new loan. Ted's number is 503-891-4205 and website is shown below.
best to you
Web Reference:
0 votes Thank Flag Link Tue Aug 23, 2011
Brenda is dead on on this one.
0 votes Thank Flag Link Tue Aug 23, 2011
The way I understand it is that FHA will loan one year from the date of sale if there are extenuating circumstances that caused you to have to do the short sale, like illness, for instance. With showing financial mismanagement, it would be 3 years from the completion date. For VA Loans, they would require a two year period from completion of the short sale. Conventional loans: 2 years from the sale date with an 80 percent loan to value, 3 years from sale date for a 90 percent loan to value with extenuating circumstances and 4 years with financial mismanagement. So the answer for a 6 month period is no, and I hope the rest makes sense to you.
0 votes Thank Flag Link Tue Aug 23, 2011
The guidelines for most conventional and government programs require 2 years since the date of the short sale.

I may be able to approve you on a private equity loan, but that will be more expensive and a much higher rate.
0 votes Thank Flag Link Tue Aug 23, 2011
There should be. I recommend you start with the bank you currently do business with first.
0 votes Thank Flag Link Tue Aug 23, 2011
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