Fannie Mae will now allow you to purchase a home 2 years after a short sale with a 20% down payment and 4 years after with a 10% down payment, with re-established credit. If there were documentable, extenuating circumstances, you may be able to buy after 2 years with 10% down.
FHA has a 3 year waiting period after short sale, however, you may be eligible for a new FHA loan immediately after a short sale if:
o All mortgage payments due on the prior mortgage were made within the month due for the 12 month period preceding the short sale and,
o All installment debt payments for the same time period were also made within the month due.
Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on his or her principal residence simply to:
o Take advantage of declining market conditions, and
o Purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.
Borrowers in default on their mortgage at the time of the short sale are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale.