How long does a buyer have to wait before they can Apply for a Mortgage after a Bankruptcy, Foreclosure or Short Sale?
FHA Guidelines
Foreclosure or Deed in Lieu of Foreclosure
* 3 years from date foreclosure completed and transferred back to the bank. The date the Deed is transferred out of the borrower’s name is the date that will be used for seasoning.
* Less than 3 years but not less than 12 months from date of foreclosure completion and transferred back to bank with acceptable extenuating circumstances. Extenuating circumstances are defined as death in family, medical illness and not divorce or loss of job.
Short Sale
* 3 years from date sale closed and transferred to the new owner.
* No waiting period if borrower had no late payments on any mortgages. And consumer debts within the 12 month period preceding the short sale . AND the buyers are not taking advantage of declining market conditions.
How long does a buyer have to wait before they can apply for a mortgage after a bankruptcy, foreclosure or short sale?
Bankruptcy Chapter 7
* 2 years from date of discharge with re-established credit paid as agreed or no new credit obligations incurred.
* Less than 2 years but not less than 12 months from date of discharge.The bankruptcy was caused by acceptable extenuating circumstances. And borrower has since exhibited a documented ability to manage financial affairs in a responsible manner.
Bankruptcy Chapter 13
* 1 year payout period under bankruptcy has elapsed and the borrower’s payment performance has been satisfactory. All required payments were made on time. Must have bankruptcy trustee’s permission in writing to purchase.
VA Guidelines
Foreclosure and Deed in Lieu of Foreclosure
* 2 years from date of the foreclosure completion and transferred back to bank.
* 12-23 months from date foreclosure completed and transferred back to bank – if credit re-established and paid as agreed. And was caused by acceptable extenuating circumstances.
Short Sale
* VA does not establish a seasoning requirement for a short sale.
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