Buying after a short sale?

Asked by Peaceandpowerparenting, Hurd, ME Thu Dec 6, 2012

I am hearing mixed answers. Is the waiting period to buy again after a short sale 2 or 3 years on an FHA loan? Is is 3.5 % down with a minimum 580 Fico score?

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Michelle Gon…, Agent, Los Alamitos, CA
Sun Dec 9, 2012
I had 2 short sale sellers that sold 3 years ago buy this year (waiting period was 3 years). They bought FHA with the minimum 3.5% down. The minimum FICO score needed was a 640 mid score. If you have any other questions feel free to call me.
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Leah Wise, Agent, Buena Park, CA
Thu Dec 6, 2012
You can purchase as early as 3 years and we have seen less. Getting set up right after a short sale to start rebuilding your credit is important so you have more options. For people wanting to stay in their home if you qualify you can do the short sale, lease back and then buy back. Its a program that allows you to sell your home and lease it back with the option to buy it back after the end of a 3 year period at the current market rate. Give me a call for more details about either buying later or the SS-LB-BB. Thank you!

Leah Wise & Dustn Wise
Keller Williams Realty
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, ,
Thu Dec 6, 2012
Lender checking in: Please read below regarding the waiting periods for short sales and foreclosures. In short, that 580 credit score needs to be a 620 for for FHA. Take a look at your credit report and see if your balance/available balance is over 50% and that could be skewing your marks. Otherwise..let the lates go behind you. Whatever you do, do NOT attempt to have those late payments on the mortgage be repaired. Let the 'Last Activity' get older and older lest you have to wait another 3 years from the time of the late event.

FHA: 2 years if your foreclosure is due to ‘extenuating circumstances’. This would be serious illness or death of wage earner. Divorce or job transfer is not considered ‘extenuating’. Otherwise, 3 years from date of transfer back to the lender.

VA: 2 years from date transferred back to lender. 12-23 months if credit is reestablished and foreclosure was due to ‘extenuating circumstance’. This would be unemployment, prolonged strike, medical bills not covered by insurance. Divorce is not considered extenuating.

Conventional: 3 years with ‘extenuating circumstances’ and 10% down payment. Extenuating circumstance would be any non-recurring event that was beyond the borrower’s control that resulted in a sudden significant and prolonged reduction in income or catastrophic increase in financial obligations. Otherwise 7 years.

USDA: Less than 3 years with ‘extenuating circumstance’ loss of job, delay or reduction in government benefits or other loss of income, increased expenses due to illness, death, etc. Otherwise 3 years.
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Thanks for checking in. I love it when lenders answer finance related questions!!!!! We all benefit from you sharing your knowledge.

Kawain Payne, Realtor
Flag Tue Dec 11, 2012
Christopher…, Agent, Tarrytown, NY
Thu Dec 6, 2012
Hi, it could be 2 or 3 depending on the reason. The minimum down payment is 3.5% and technically the minimum credit score is 580 but finding a bank that will fund under 620 is hard these days.
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