How long after a bank approved "short sale" can you get a mortgage, assuming you otherwise qualify?

Asked by Michael Layer, 30067 Fri Aug 26, 2011

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Bill Gassett, Agent, Hopkinton, MA
Sat Sep 24, 2011
Here is a complete comprehensive guide that explains how long you will have to wait to buy again after going through a short sale or foreclosure:…
1 vote
Radinka Ilsi…, Agent, Lakewood Ranch, FL
Fri Aug 26, 2011
Do you mean if you had to short sale your own home? If so, it's about 2.5 years currently before the banks will consider you for a new loan.
Fannie Mae states that you can buy a new home immediately, however I've yet to seen that happen that a major lender will loan you money, and if they can bet the interest rate will be hefty!
However if you've had to shortsale because of a job transfer, sometimes they can be more lenient.
1 vote
Joycelewis412, Home Buyer, Sacramento, CA
Sat Aug 17, 2013
FHA will allow you to purchase right away if you did a short sale but had no mortgage lates and you did the short sale to relocate out of the area for work, etc.

Check if you qualify for a mortgage. Try
0 votes
Steve Vinson, , Florida
Thu May 9, 2013
3 years if FHA; 4 years if Fannie/Freddie; 7 years if strategic default
0 votes
Patti Kane, Home Buyer, Boulder, CO
Wed May 8, 2013
I had a short sale last year and my Realtor recommend for a home loan. I am very happy to be able to purchase again.
0 votes
, ,
Sun Sep 25, 2011
If you're seriously thinking about purchasing another home after a short sale, I would absolutely consult with a mortgage professional prior to closing your sale. This subject has become a very slippery slope and especially this past week. I thought I had a clear and concise understanding on the subject, but apparently I was wrong. I have closed several of these in the past and I have several of these type transactions in my pipeline and it is these recent file where I have been thrown a curve. It appears that the line in the sand keep moving. My suspicion is the big banks are getting really irritated that some of these previous homeowners (who short sold their home) are getting back in the game. The banks seem to forget there are some legitimate reasons for homeowners to short sell their homes. In better economic times, there were those cases where people simply lost their jobs and couldn't afford to make their payments. But as a viable reason today, apparently that's not good enough anymore. Like everything else, it appears that the consumer is the one getting the squeeze.
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, ,
Sat Sep 24, 2011
Extremely quick 2 thumbs up after your answer there Bill Gassett (like within a couple minutes), considering how long that blog article is.
0 votes
Pamela Cohn, Agent, Clearwater, FL
Sat Aug 27, 2011

There seems to be some confusion among the answers whether they are talking about when the Seller is able to get a loan again or when the Buyer's loan process begins. I am assuming you are interested in the latter.

In Florida, the latest and most Short Sale Addendums state that the loan process begins for the Buyer once the Buyer receives the Seller's Lender(s) written approval of the "Short Sale". Usually 30-45 days is the max most Seller's lenders will allow from this time frame to close.

As Steve said earlier, you should have met with a lender to get a pre-approval letter to present with your offer. Most Listing agents and Seller's Lenders will not considered an offer without it. It is just as important for you also, to know what you can qualify for and comfortably afford. Once it is approved your mortgage broker will want to pull credit and start processing the loan immediately to meet the time lines, while you do inspections. Once your inspections are done they will order an appraisal and then your survey. Everything in order so that you are not paying for a step until you know you are moving forward.
Since there is a lot to do in a short amount of time, after waiting for possibly a long time, it is very important that you get all the information your mortgage broker needs to them as quick as possible. I suggest getting it all in during the waiting period, then you will only need to update a few parts.

I feel an informed client makes the best decisions regarding their real estate needs. Let me know if I can be of assistance.


Pam Cohn
Broker Associate, GRI, SFR, CDM, NHS
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty
2539 Countryside Blvd #3 Clearwater, FL 33761
0 votes
hello. I went to a mortgage broker, and sat for quite a while. he pulled up my short sale which completed 11/2011 and advised me I DO qualify for a loan again. He preapproved me for $90,000. I then went and started to look, and put an offer in on a condo that is Home Steps Approved. Now, he disappeared, so I guess he never really had a lender. Some are saying three years, some 2 years, one said 1 year on a back to work program. However, those closing rates (which I know usually run around 4-6% of purchase), came back at almost 10% with this one lender. I felt something was not right, and pulled out of the offer as the closing costs were ridiculous on a $58K property. I cannot seem to now locate a lender with short sale 2 years ago, although I was given different information from the get go. There has to be lenders out there, for FHA approval(which supposedly I am), and the home steps program. Can you advise???
Flag Thu Feb 27, 2014
, ,
Fri Aug 26, 2011
Q: How long after a bank approved "short sale" can you get a mortgage, assuming you otherwise qualify?
A: It is different depending on the type of financing you are applying for.

FHA can be 1 day afterwards if you made all of your mortgage payments & consumer debt payments on time for the 12 months prior to the short sale AND you are not taking advantage of declining market conditions by purchasing a similar or superior home within the same commuting area. Otherwise if you don't meet those guidelines, it's 3 years from the short sale date for FHA financing, although if there was extenuating circumstances surrounding the short sale (such as the death of a wage earner, etc.) then even if the mortgage was in default at the time of the short sale it's possible to purchase right afterwards.

VA doesn't have any written policies on short sales, but a lot of lenders abide by the FHA guidelines, although they allow to purchase after 2 years in the case of delinquencies, not the 3 years that FHA imposes. A lender that underwrites to VA's guidelines could potentially allow a purchase 12 months after a short sale with mortgage delinquencies.

Conforming (Fannie Mae & Freddie Mac) financing requires 2 years with 20% down, 4 years with 10% down, and at 7 years you can put down the program minimum (which is currently a 3% down payment). If there was extenuating circumstances then at the 2 year mark you can just put down 10%. Fannie Mae does not permit "1 day after short sale financing", I believe Radinka was getting Fannie Mae guidelines mixed up with FHA guidelines.

With FHA & VA financing, there is no difference in interest rates between financing 1 day after a short sale or 3 years after a short sale. Mortgage interest rates are credit score sensitive though, and so the further away from a short sale the more time the scores have had to recover.
0 votes
Anthony Russ…, Agent, Treasure Island, FL
Fri Aug 26, 2011
. FHA would do it right away, under certain circumstances. If you were currant a year prior to the short, the bank may allow another mortgage.
0 votes
Steve Vinson, , Florida
Fri Aug 26, 2011
You would have already recieved a preliminary mortgage approval in order for a bank to approve a short sale, otherwise your offer wouldn't have been approved to begin with. But if the listing states that, it merely means that the current bank has agreed to a short sale. But to answer your question.
When we issue a mortgage approval it stays open for 120 days giving the bank suffcient time to approve your offer. Giving that Bank America is notorius for running 90 days and Wells Fargo 45, its safe to assume you will have to update all your documents once you have a contract
0 votes
Rich Bennett, Agent, San Francisco, CA
Fri Aug 26, 2011
Hi Michael-

You should be pre-approved with a lender prior to writing any purchase contract, short sale or otherwise. Once you're approved and the seller has accepted your offer, then you begin the wait for the response from the bank (s). It may be a long time before the lender responds, if at all, so you may need to update your pre-approval periodically. Otherwise, once the lender accepts the terms, then you proceed as you normally would with your mortgage, inspections, etc. You should be counceled by your realtor on each step as you move through the process.

Good luck.

Rich Bennett, Realtor

Zephyr Real Estate
Web Reference:
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