Here is my response from a highly rated mortgage broker who surpasses major lenders in turn around time. I have had several sales delayed due to the conditions that lenders place on loan commitments when the buyers went to "well known banks" who almost put sellers and buyers in a tail spin.
Will gets things done, appraisals are ordered IMMEDIATELY and do not take 2-3 weeks to complete,
please read below:
Yours is an excellent question that is popping up more and more these days and there are different answers depending upon several factors.
If you are buying a new PRIMARY RESIDENCE and you have had no lates since the short-sale, then:
- Fannie Mae will allow financing (as long as you qualify under normal terms) with 20% down 2 years after the conclusion of the pre-closure (Short Sale). With only 10% down, the wait time is 4 years unless there are extenuating circumstances such as death of primary wage earner, serious illness of wage earner or similar dire circumstances. Bankruptcy, loss of job or downturn of the real estate sector is not considered extenuating per Fannie guidelines. ïŒ Freddie Mac is similar or worse.
- FHA will allow normal financing 3 years after the short-sale. They will allow immediate financing after the short-sale (not in the same community) if you were never late during the short-sale period. This practically never happens since most lenders do not allow the short-sale unless the borrower is late on their payments!
- VA is two years.
If you are buying a new VACATION/INVESTMENT home and you have had no lates since the short-sale, Fannie and Freddie allow financing after 7 years. FHA/VA do not allow financing of these properties per their guidelines.
Lastly, although these are the guidelines of the government entities, many investors now have overlays on these guidelines so it is always wise to work with a lender who is very educated and up to date.
Sr. Loan Officer
Summit Mortgage Corporation