How Soon Can I Buy a House After A Short Sale?
If your home was sold through a short sale, your credit would have been negatively affected, although possibly not as much as if you had lost your home through foreclosure. The amount of time you must wait before applying for a new mortgage loan depends on the type of home loan and your financial circumstances.
Eligibility for an FHA Loan after a Short Sale
The amount of time you must wait to obtain a new FHA mortgage varies, depending on your credit history and the reasons for the short sale.
Borrowers in default on the old mortgage loan at the time of the short sale, must wait at least 3 years before applying for another FHA loan. The 3-year waiting period starts from the date of the short sale, or if the prior mortgage was also an FHA-insured loan, from the date that FHA paid the claim on the short sale.
Exceptions: You may be able to qualify sooner than 3 years if you can show that extenuating circumstances caused the mortgage default. Extenuating circumstances might include:
Eligibility for a Fannie Mae/Freddie Mac Loan after a Short Sale
Waiting periods for a Fannie Mae or Freddie Mac mortgage loan following a short sale vary, depending on how much money you are can put down as a down payment. Your waiting period will be:
FNMA:
Freddie Mac:
Exceptions: If you can also meet the following requirements you may be able to shorten the waiting period to 2 years for a Fannie or Freddie home loan if the borrower can provide documentation that the short sale was the result of extenuating circumstances.
Eligibility for a VA Home Loan after a Short Sale
VA lenders do not have a seasoning requirement imposed by the government, but Certainty will only consider financing a VA home loan 2 years after a short sale.
Contact a Certainty mortgage professional to discuss your eligibility for home financing.
Eligibility for an FHA Loan after a Short Sale
The amount of time you must wait to obtain a new FHA mortgage varies, depending on your credit history and the reasons for the short sale.
- You may not be subject to a waiting period to apply for a FHA-insured mortgage loan following the short sale if:
- You were not in default on the mortgage for the 12 months preceding the short sale, and you were not in default on the prior mortgage at the time of the short sale, and
- You made all of your old mortgage and other installment debt payments on time for at least 12 months leading up to the short sale, and
- Lien holders agree to release their liens and forgive the deficiency balance on the real estate.
Borrowers in default on the old mortgage loan at the time of the short sale, must wait at least 3 years before applying for another FHA loan. The 3-year waiting period starts from the date of the short sale, or if the prior mortgage was also an FHA-insured loan, from the date that FHA paid the claim on the short sale.
Exceptions: You may be able to qualify sooner than 3 years if you can show that extenuating circumstances caused the mortgage default. Extenuating circumstances might include:
- Serious illness or death of a wage earner
- Divorce if mortgage was current at the time ex-spouse received the property
Eligibility for a Fannie Mae/Freddie Mac Loan after a Short Sale
Waiting periods for a Fannie Mae or Freddie Mac mortgage loan following a short sale vary, depending on how much money you are can put down as a down payment. Your waiting period will be:
FNMA:
- 4 year time period from completion date
Freddie Mac:
- 4 year time period from completion date if
- O/O purchase < 90% LTV/CLTV/HCLTV or a rate/term refinance
- 7 year time period from completion date if
- LTV/CLTV/HCLTV > 90% OR
- cash out refinance any occupancy OR
- 2nd home and NOO purchase
Exceptions: If you can also meet the following requirements you may be able to shorten the waiting period to 2 years for a Fannie or Freddie home loan if the borrower can provide documentation that the short sale was the result of extenuating circumstances.
Eligibility for a VA Home Loan after a Short Sale
VA lenders do not have a seasoning requirement imposed by the government, but Certainty will only consider financing a VA home loan 2 years after a short sale.
Contact a Certainty mortgage professional to discuss your eligibility for home financing.