Many people are starting to look at buying homes again after a foreclosure.  It is definitely possible, there are a few guidelines you have to follow.

If you had a foreclosure, Fannie Mae and Freddie Mac require a seven year wait after a foreclosure.  There are a few circumstances where you can buy earlier but you have to prove extenuating circumstances.  FHA requires three years after a foreclosure.  FHA did come out with a new policy that may allow you to buy after one year, but you will have to meet specific guidelines and it has to meet the Back to Work guidelines that FHA published in August.

In all cases you must have re-established your credit history and show that the reason for the foreclosure should not happen again. 

If you have had a short sale, the waiting period is much shorter, but again you need to show re-established credit.  FHA will allow you to buy after one year if you can show that the reason for the short sale meets the Back To Work guidelines.  There are also times where you can buy immediately, but there can not have been any late payments prior to the shortsale.   Fannie and Freddie both require taht you have at least four year and up to seven years after a short sale. 

With extenuating circumstances, you may be able to buy after two years, but you will also have to put 10% down on the new home.  Divorce, not being able to sell due to a work relocation are not extenuating circumstances.  Extenuating circumstances are typically a death to a primary wage earner or sometimes if the main employer in a small town goes out of business affecting your income.

If you think you may be eligible to buy after a short sale or foreclosure, contact your loan officer and see if you are ready.  If you are not quite ready, we can let you know what you need to do in order to purchase a new home.  Make sure your credit report is correct and your credit score is at least 640 or higher.  Most lenders want to see a 640 score for FHA and 660 or higher for conventional.  The worst thing that could happen is that you need to wait longer, the best thing would be that you are ready to buy now!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants – EmailWebsite

About Leslie Vanderwerf

Currently a Branch Manager for American Mortgage and Equity Consultants, Inc., it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

Related Posts

Bidding wars – make sure you are prepared

Many of my clients that are buying homes are finding themselves in multiple offer situations.  Because of the inventory, low home prices and low interest rates, we are seeing many homes with multiple offers on them.  That will drive up the sales price and can make it more frustrating for home buyers! If you know.

Read More

How to get from your preapproval to closing on your house…….

While it may seem simple that you just need to keep paying your bills after the excitment of getting preapproved for a mortgage, some forget the little things!  While the approval is good for 90 days, we will verify additional information during that 90 days.  Little things can mean an approval can change from approved.

Read More

Reasons People Can’t Get a Mortgage

The great news for home buyers is that home prices are low and interest rates are also very low.  The bad news is that with the number of people that have defaulted on their mortgages, lenders are more cautious about approving new loans.  Here are a few things to watch out for: -Bad Credit:  The.

Read More