I recently sold my home in a short sale due to a job transfer, how much longer will I have to wait before I can purchase another home?

Asked by Alexandra Ambriz, San Marcos, CA Sat Jun 23, 2012

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Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Thu Aug 30, 2012
It depends on the circumstances and the type of loan you had and the type of loan you are applying for. I copied this from FHA’s 4155:

A borrower is not eligible for a new FHA-insured mortgage if he/she pursued
a short sale agreement on his/her principal residence simply to
• take advantage of declining market conditions, and
• purchase a similar or superior property within a reasonable commuting
distance at a reduced price as compared to current market value.
Borrower Current at the time of Short Sale
A borrower is considered eligible for a new FHA-insured mortgage if, from
the date of loan application for the new mortgage, all
• mortgage payments on the prior mortgage were made within the month due
for the 12-month period preceding the short sale, and
• installment debt payments for the same time period were also made within
the month due.
Borrower in Default at the time of Short Sale
A borrower in default on his/her mortgage at the time of the short sale (or preforeclosure
sale) is not eligible for a new FHA-insured mortgage for three
years from the date of the pre-foreclosure sale.
Note: A borrower who sold his/her property under FHA’s pre-foreclosure
sale program is not eligible for a new FHA-insured mortgage from the date
that FHA paid the claim associated with the pre-foreclosure sale.
Exception: A lender may make an exception to this rule for a borrower in
default on his/her mortgage at the time of the short sale if the
• default was due to circumstances beyond the borrower’s control, such as
death of primary wage earner or long-term uninsured illness, and
• a review of the credit report indicates satisfactory credit prior to the
circumstances beyond the borrower’s control that caused the default.
0 votes
Claudia Mull…, Mortgage Broker Or Lender, Fremont, CA
Thu Aug 30, 2012
Dovetailing on SteveO's response,

Job transfer is one of the ONLY acceptable short sale explanations.

As long as your payments were made on time, you can purchase right away.

If you had be late on payments, you will be required, with conventional financing, to put a 20% down payment and may not apply for you loan until 24 months + 1 day pass. I just recently closed this transaction and there was no job transfer.

Less down payment, more time to wait.

FHA states 3 years under any circumstances.

I would say with a job transfer, you should find a reputable mortgage professional who can put a complete package together for you and submit it to an underwriter for their approval. That way you know for sure.

Happy to help, if you would like. cg
0 votes
Steven Ornel…, Agent, Fremont, CA
Wed Jun 27, 2012

FHA financing normally requires THREE years from the short sale; HOWEVER, IF 1) the mortgage payments were made on time within the 12 months prior to the short sale, and 2) you aren't looking to purchasing a similar or larger home in the same area as short sale you can actually buy the very NEXT DAY after escrow closes on your Short Sale.

Conforming loan guidelines state a minimum of TWO years and 20% down; however, if the short sale was due to documentable "extenuating circumstances" (divorce, medical, job loss, death of a wage earner, etc.) then you only need 10% down.

Extenuating Circumstances "are nonrecurring events beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations."

0 votes
Chris Gorno, Agent, Carlsbad, CA
Mon Jun 25, 2012
Hello Alexandra~

Let us know the date you closed escrow on your short sale, what type of loan you would be taking out (Conventional ,FHA, VA) and if you had any late payments. The answer to your question, will vary based on those answers.

There have been some recent changes with the credit reporting bureaus, regarding how they report a short sale.

I highly reccommend speaking with an Agent reccommended lender (we align ourselves with the best professionals) to take a look at your situation. There are new conventional Loan Programs that only require 5% down, with no Mortgage Insurance.

Any one of us, can help get you into position to buy again, sooner than later!

Best of luck to you Alexandra!

Chris Gorno
Windermere Real Estate SoCAL
DRE #01499885
0 votes
Sinead McAll…, Agent, Oceanside, CA
Sat Jun 23, 2012
Hi Alexandra,
It really depends on what "recently" is. I recently had clients who short sold and they just purchased again. They were getting an FHA loan and had to wait 3 years. Feel free to contact me directly and I can put you in touch with a great lender that will run all the scenarios for you.

Sinead McAllister
McAllister Homes Real Estate
0 votes
Ron Thomas, Agent, Fresno, CA
Sat Jun 23, 2012
My suggestion would be to apply in a year or so;

I believe that people with a good reason, such as medical or job, might get special consideration;

the reason is simple, the Banks will have a shortage of qualified customers and they will bend the rules if they have to.

stands to reason, nuh?
0 votes
Michael Harr…, Agent, Chula Vista, CA
Sat Jun 23, 2012
Two years from the date that your home sold and ownership was transferred to the buyer of your home.
0 votes
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